Another Orange County Office Campus Converting to Industrial

Greenlaw Partners and Walton Street Capital are planning to convert an office campus in Santa Ana to industrial use.

Greenlaw and Walton are planning to revamp Park 55, a five-building business park located at 1221-1251 East Dyer Road. The partners also are looking for an investor to buy a $60M senior loan tied to the property, according to a report in the Orange County Business Journal.

Irvine-based Greenlaw and Walton, based in Chicago, bought what was then the Orange County Business Center in 2018 for $17M. They have since spent $10M upgrading the campus. Cushman & Wakefield has listed the property.

The plans call for two office buildings to be demolished and replaced by three industrial facilities of 69K SF, 47K SF and 59K SF.

Greenlaw sold a two-building office campus on the other side of the 55 Freeway to Terreno Realty for close to $15M. The new owner plans an office-to-industrial conversion, the Business Journal reported.

Earlier this year in Orange County, the fault line between a booming industrial sector and a sagging office market could be found in what might be the nation’s largest cluster of office-to-industrial conversions.

According to a Q1 market report from JLL, 17 properties encompassing 3.2M SF of office space are slated for office-to-industrial conversion in Orange County, part of a SoCal industrial market that as a region now has an industrial footprint of more than 2.3B SF.

Elevate @ Harbor in Santa Ana, comprised of two office properties, is being demolished to make way for proposed industrial facilities after being sold in February.

In May, Kearny Real Estate disclosed plans to demolish an Orange County office campus it recently spent $15M to renovate and replace it with a warehouse.

Los Angeles-based Kearny is partnering with Dune Real Estate Partners to build a 163K SF warehouse at 3130 South Harbor Boulevard, replacing two office buildings. Kearny bought the two-building office campus in 2018 for about $35M and invested an additional $15M to renovate it, aiming to attract a millennial workforce.

“Taking into account the ongoing weakness in the Orange County office sector, our analysis showed that, despite what we’ve already invested, the optimal long-term use for the property was industrial,” Dan Broder, a senior associate at Kearny, said in a statement.