Cambro Manufacturing Inks $65M Lease Deal in OC

Cambro Manufacturing is consolidating its operations under one roof in Orange County, and it has signed a significant lease deal to accommodate the move. The firm inked a 433,865-square-foot lease transaction for building two at the Huntington Gateway, an industrial development in Huntington Beach. The lease transaction was valued at $65 million.

The company is not new to Huntington Beach. It has operated in the market for 70 years; however, it is now moving its City of Industry operations into Huntington Beach. Wes Hunnicutt, a senior managing director at Newmark, said the lease was a “smart move” for the firm because it will reduce transportation expenses and increase efficiency. Hunnicutt represented the tenant in the deal along with fellow senior managing director Matt Moore. Executive managing directors Jeff Read and Scott Read and managing director Greg Osborne represented the landlord in the deal, Sares Regis.

Building two is part of the second phase of the Huntington Gateway development, and it will deliver in the third quarter 2022. At 56 acres, phase two includes four other buildings ranging in size from 109,892 square feet to 233,706 square feet.

The lease is a prime example of the strength of the Orange County industrial market, which has been positively impacted by the pandemic. Research from JLL found that industrial leasing activity in Orange County has hit levels not seen since 2014. During the quarter, there were 57 total totaling more than 2 million square feet. That is a 15% increase over the third quarter average for the past five years. In addition, demand shifted from smaller properties to large industrial boxes, like the one Cambro will occupy. As a result, there has been some lagging demand for smaller industrial properties.

While the research shows limited demand for small box industrial, it is still an active leasing market. Earlier this year, Los Patrones Business Park, a 100,000-square-foot property in Orange County, secured 11 new leases. The property is the first new multi-tenant industrial facility to come to market in Orange County in more than a decade.

According to the Newmark brokers that worked on this deal, modern industrial space is in the highest demand and in some cases has lead to a bidding war among tenant looking to secure space. Huntington Beach is the tightest submarket in Orange County with a .9% availability rate, illustrating the limited opportunities for tenants in the market.