A two-building office campus is Santa Ana is being torn to shreds this week as a redevelopment project ratchets into high gear.
Kearny Real Estate is replacing Elevate@Harbor at 3100 and 3130 S. Harbor Blvd. with a logistics warehouse.
Among Elevate’s tenants was Optima Tax Relief, which has since shifted its headquarters to Griffin Towers on Hutton Center Drive next to the 55 freeway. CEO David King told the Register last May that the move was overdue, as the Elevate building was “past its prime.”
Office space is experiencing a shift as landlords weigh the pros and cons of renovating aging buildings as post-pandemic demand remains weak. We’ll note that Optima’s new home sold at a 36% loss in April when Barker Pacific Group and Kingsbarn Realty Capital bought it from Blackstone for $82 million.
Kearny is not alone in the push to replace low-rise office complexes with industrial. The industrial conversion trend has gained traction, especially in Santa Ana, which has a large cohort of older office and commercial campuses that are struggling to maintain tenants.
Kidder Mathews in a 2023 fourth-quarter report released in January said Orange County’s industrial market “continues to be strongly competitive, despite a decline in demand from its peaks in the prior year.”
Vacancy rates for industrial properties were 2.6% in the quarter. The average price per square foot was $305, while the cap rate was 4.7%.
The office vacancy rate, by comparison, was 12.4%, according to a separate Kidder Mathews’ report on office space in the county.
“The pandemic’s continued implications for Orange County’s office market have resulted in many companies reducing their workspaces or adapting to hybrid work arrangements due to the escalating costs of office space,” the brokerage’s researchers said.
Just a few miles to the east in Santa Ana, another single-story property is being redeveloped into a warehouse.
This trio of buildings adjacent to the 55 freeway will be vacated and demolished, making room for a new rear-load distribution warehouse expected to come online in 2025. Terreno Realty Corp. paid $14.8 million for the complex at 1720 E Garry Ave. and will spend $40.6 million converting the site into a 91,500-square-foot, industrial building. (Photo courtesy of Terreno Realty Corp.)
The three-building commercial complex at 1720 E Garry Ave. in Santa Ana is being replaced by a distribution facility, joining a growing field of logistics buildings sprouting along the southern stretch of the 55 freeway. The former Ricoh campus is nearly transformed, replaced by a massive sprawl of logistics warehouses under development by Dermody Partners.
As for Elevate@Harbor, Ampco North is making quick work of the demolition. Kearny expects to complete Harbor Logistics Center, a 163,000-square-feet Class A warehouse, by the end of the year.
Dan Broder, a vice president at Kearny, said industrial real estate near John Wayne Airport is hot for investors.
“However, due to the limited amount of land in which to develop, the market lacks modern product that today’s logistics operators need to efficiently move goods throughout the region,” Broder said.
The new warehouse will include 7,000 square feet of office space, 36-foot clear heights, 17 dock-high doors, sprinklers and truck parking. Kearny is also planning for rooftop solar panels and EV charging stalls.
New CEO for ORCO in Stanton
Dave Echternach, formerly vice president at ORCO Block & Hardscape in Stanton, has been promoted to chief executive, effective immediately. He replaces Rick Muth, who is shifting to chairman of the company’s board of directors. Echternach has nearly 20 years of leadership with ORCO. The business, family-owned for 75 years, makes concrete masonry units, pavers, slabs, mortarless wall units and specialty mortars.
Irvine’s Ware Malcomb taps 4 ‘practice leaders’
Ware Malcomb, a design, architecture and engineering firm in Irvine, has created a new leadership role called ‘practice leader,’ which it said is aimed at diversifying its business and support in particular categories.
Team members at Ware who were recently named practice leaders include Luciana Arim, Science & Technology; Kate Lyle, Industrial Cold & Food; Anthony Simon, retail and Charles Swanson, multifamily. “These leaders have distinguished themselves as experts in their fields, and firmwide leaders in their discipline,” said Peter Priebe, director of Special Practices at Ware Malcomb.
Howard Schwimmer, Costa Mesa-based Rexford Industrial’s co-chief executive and director, is being inducted into NAIOP SoCal Hall of Fame as part of its 2024 Industry Awards Gala in May. (Photo courtesy of NAIOP SoCal)
Rexford’s co-CEO Schwimmer headed for Hall of Fame
Howard Schwimmer, Rexford Industrial’s co-chief executive and director in Costa Mesa, is being inducted into NAIOP SoCal Hall of Fame as part of its 2024 Industry Awards Gala in May.
In his 40-year career in commercial real estate, Schwimmer also was a senior managing partner, co-founder and president of Rexford’s predecessor businesses and held executive roles at DAUM Commercial Real Estate.
The awards Gala recognizes excellence in Southern California’s real estate community.
Nominations for NAIOP SoCal awards are due by March 8. For submission requirements or to submit a nomination, go to tinyurl.com/4ermfurj or contact Dianna Xochitiotzi, dxochitiotzi@naiopsocal.org.
Real estate transactions, leases and new projects, industry hires, new ventures and upcoming events are compiled and written by Business Editor Samantha Gowen. Submit items and high-resolution photos via email to sgowen@scng.com. Please allow at least a week for publication. All items are subject to editing for clarity and length.
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