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BIXBY LAND SWINGS BACK TO INDUSTRIAL

Orange County Business Journal

MARK MUELLER

Bixby Land Co., one of the area’s most active developers of creative-office space, is putting more of its money into Orange County’s industrial market.

The Newport Beach-based real estate investor and developer recently closed on the purchase of 1400 Allec St., a 121,341-square-foot industrial building in Anaheim.

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The building, just north of the Platinum Triangle area around Angel Stadium, is fully leased to Blue Line Foodservice, a Farmington, Mich.-based food distributor, restaurant equipment and restaurant supplies provider.

Blue Line uses the distribution facility to serve area Little Caesars restaurants. It signed a 10-year lease at the property last year.

Bixby Land paid about $18.2 million, or $150 per square foot, for it in an all-cash deal. It was sold by Newport Beach-based Alere Property Group LLC.

Alere paid about $9.2 million for the industrial building in 2005, according to CoStar Group Inc. records.

It’s Bixby’s largest reported Orange County buy since mid-2015, when it paid about $42.5 million for a 262,463-square-foot building in the Irvine Spectrum that was previously used by Kawasaki Motors Corporation USA.

Bixby has since leased the one-time Kawasaki facility to high-end electric car maker Karma Automotive LLC, which announced in August that it was moving the bulk of its local operations from Costa Mesa to the upgraded Irvine property.

Bixby has made a name for itself the past few years renovating older offices and industrial buildings in Southern California and Silicon Valley into creative-office projects with open floor plans and amenities ranging from walking paths to outdoor break areas geared toward workers.

That’s not in the cards for the just-bought Anaheim property, which will remain as-is.

The company’s recently putting more of its money into largely full income producing industrial properties, according to Mike Severson, Bixby’s senior vice president of investments.

“We remain committed to an investment strategy that identifies high quality warehouse distribution product,” Severson said in a statement.

“Bixby has acquired over $100 million of industrial product over the last 24 months, and we have a strong appetite for this type of product going forward.”

The company invests in industrial properties in the $5 million to $50 million range, with an emphasis in those valued to $20 million. Buildings on the West Coast, Arizona and Nevada are its main markets.

The company’s other recent industrial acquisitions have been in Seattle and San Bernardino.

OC remains a focus of the company’s investment push, according to Severson.

“From our perspective, the supply and demand fundamentals for industrial space in Orange County have never been better,” he said.

Busy Month

Jeff Chiate, Jeff Cole, and Rick Ellison at Cushman Wakefield Inc.’s Irvine office represented Alere in the latest deal, and Bixby represented itself.

It’s the latest sizable deal involving Cushman’s local capital markets team. It was also involved in two big area office deals in the past month, the $50.5 million sale of Santa Ana’s 3 Hutton Centre office tower to San Diego-based Cypress Office Properties LLC, as well as the estimated $255 million sale of Irvine’s five-building Google Center office campus to the billionaire owners of Redland-based digital mapping company ESRI.

The later transaction is the priciest office deal reported in OC in several years.

The recent surge of completed deals isn’t reflective of the market at large, which has seen large institutional investors pull back on commercial real estate deals in the region for much of the past six month or so, according to Cole, an executive director at Cushman.

Deal volume of that type is down about 25% from year-ago levels.

Sellers of larger OC buildings have nonetheless seen any void left by the slow-down in institutional capital-chasing deals get filled largely by high-net-worth investors and foreign buyers who are looking to diversify their portfolios and see OC as a strong market for rental growth and price appreciate, Cole said.

Jack and Laura Dangermond—co-founders of ERSI and holders of a fortune estimated by Forbes at $3.1 billion—are among the wealthy private investors that have bought OC buildings. The Dangermonds paid an estimated $255 million for the five-building Google campus in Irvine a few weeks ago. Corona-based Monster Energy’s top two executives—Rodney Sacks and Hilton Schlosberg, both members of the Business Journal’s annual OC’s Wealthiest list, with estimated fortunes of $2.5 billion apiece—in July paid an estimated $95 million for Savi Tech Center, a four-building business park in Yorba Linda.

That deal was also brokered by Cushman’s local capital markets team.