Functional Office Product Gets Razed for Industrial Redevelopment
Four office buildings totaling 221,921 square feet on approximately 13 acres in Lake Forest recently sold in two separate transactions to the joint venture of Western Realco and RREEF. The joint venture made the acquisition on a land basis with intent to redevelop the sites into new high-end industrial use.
The sale of this campus marks a significant shift in the market cycle as fully functional low-rise office product is being razed for the redevelopment of new class-A industrial product, says Jeff Cole, one of the brokers in the deal.
Three of the four buildings in the portfolio sale are occupied by a company who makes in-flight entertainment systems, and the fourth building is vacant. The in-flight services company is expected to vacate all three buildings in less than a year.
The first transaction included the sale of three 48,480-square-foot office buildings totaling 145,440 square feet located at 26110, 26140 and 26160 Enterprise Way on 8.4 acres that will be demolished to develop a single class-A industrial building of about 162,000 square feet.
The second sale involved a single vacant 76,481-square-foot office building located on a 4.5-acre site at 26250 Enterprise Way that will be demolished to construct a new class-A industrial building totaling 78,000 square feet.
Cole, Ed Hernandez and Nico Napolitano with Cushman & Wakefield’s Irvine office represented both parties in both sales and were joined by David Dowd of CBRE in the sale of the 26250 Enterprise Way site.
“This exchange is certainly reflective of the positive outlook for future demand for light industrial supply in Orange County,” says Cole.