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Orange County-based Greenlaw Partners and Chicago's Walton Street Capital are teaming up to bring industrial space to a Santa Ana business park.
The two purchased the property in 2018 for $74M and filed plans this summer with the city government to replace two of the five buildings in the 436K SF office park at 1221-1251 East Dyer Road with three new industrial buildings, the Orange County Business Journal reported this week.
The new buildings at the site would range from 47.3K SF to 69.3K SF. In all, they would bring almost 176K SF of industrial space to the property. Offices at the site are about 55% leased, the OCBJ reported.
The $60M senior mortgage tied to the property is also up for sale.
Greenlaw sold another office campus it owned in the same area, near the 55 Freeway, to Terreno Realty Corp. in September for $14.8M, The Registry SoCal reported. Terreno is planning to raze the existing building for an office-to-industrial redevelopment project.
Greenlaw is a big name in SoCal industrial. In June 2022, it sold a portfolio of eight California and Utah warehouses leased to Amazon for $520M.
The Orange County office market has been a fertile ground for developers and owners seeking to replace office buildings with industrial uses. Often, properties that are chosen for this are in industrial areas and zoned as such. This property would require a zoning change in order for the project to be built as currently outlined, the OCBJ reported.
Developers including Goodman, Rexford Industrial Realty and Black Creek Group have office-to-industrial projects in various stages in the region.
Office leasing activity in Orange County totaled 1.9M SF in Q3, a 23% increase over the previous quarter, according to Savills, which described the overall market as slow.
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