Santa Ana Okays Office Redo as Light Industrial Campus
Aging office park to be replaced by South Coast Technology Center.
Another old Class B office campus in Orange County soon will make way for a new Class A industrial complex.
The Santa Ana City Council has given its approval to Costa Mesa-based C.J. Segerstrom & Sons to replace the Lake Center Office Park, a 180K SF campus at 3700 South Susan Street, with the South Coast Technology Center. The latter represents three industrial flex buildings, encompassing a total of 313K SF.
The three two-story office buildings, dating back to the early 1980s, will be torn down to make way for the new $126M light industrial campus. The project will accommodate a range of uses, including R&D, light manufacturing and warehousing, the Orange County Business Journal reported.
Segerstrom owns the largest regional mall on the West Coast, the 2.8M SF South Coast Plaza in Costa Mesa. Last fall, the company filed plans to redevelop a 17-acre shopping center in Santa Ana into a 1.9M SF mixed-use complex that will include 1,583 homes, up to 300K SF of offices and 80K SF of shops and restaurants.
Since the end of the pandemic, numerous aging office properties in Orange County have been converted into modern industrial facilities.
In April, TGS Management, a quantitative finance hedge fund with offices in Irvine and Princeton, announced plans to redevelop a former satellite campus it acquired from Cal State Fullerton in Irvine into a logistics hub.
TGS filed plans to develop two warehouses at 1 and 3 Banting in Irvine. The property is currently occupied by a pair of two-story office buildings encompassing a total of 138K SF.
In February, Los Angeles-based Kearny Real Estate Co. began the demolition of Elevate @ Harbor, a two-building, 197,370-square-foot office campus at 3100 and 3130 S. Harbor Blvd. in Santa Ana.
At the site, the firm is partnering with Dune Real Estate to build the Harbor Logistics Center, a 163,000 SF Class A warehouse and distribution complex. The new facility is expected to be operational in early 2025.
Kearny bought the two-building office campus in 2018 for about $35M and invested an additional $15M to renovate it. Last year, the company decided that the optimal long-term use for the property is industrial.
Leasing activity and net absorption rebounded during the second quarter of 2024 in Orange County’s industrial market. Leasing activity recorded a sharp increase, with 2.4M SF of new deals signed-the highest total in two years, according to Colliers’ market report.
Orange County’s industrial market notched 121,722 SF of positive net absorption in the second quarter. “With the uptick in leasing activity and user sales, net absorption will likely remain in positive territory for the remainder of 2024,” Colliers said.
The industrial vacancy rate in Orange County’s 239M SF market, which set a historic low of 0.9% in Q4 2022, rose to 2.9% in Q2 2024.