Kearny Real Estate Co., Dune Real Estate Partners and a Santa Ana office campus renovated for $15 million are now flipping it to create Harbor Logistics Center. This 163,000 square foot Class-A Industrial facility will be developed.
The eight-acre campus is located at 3100 and 3130 S. Harbor Boulevard, Elevate__URL__ and includes two midrise office buildings with outdoor amenity spaces, indoor/outdoor fitness facilities, a cafe on site, a conference center, and almost one acre open space.
Construction of the industrial facility is expected to start in early 2024, with delivery in 2025.
Dan Broder, Assistant Vice President at Kearny, told L.A. Business First the company acquired the property in 2018 and opened it for leasing early in 2020 following the multi-million renovation. Kearny retained tenants as the pandemic hit office markets, but the market remains rocky.
As of mid-May the offices were 62% leased.
Broder says Kearny expects Harbor Logistics Center will also see a strong demand.
He said the project cost would be comparable to other Class-A Industrial projects in SoCal. The development, which is located near the 405 Freeway, Route 55, will also feature dock doors, 36-foot-high clear heights and high visibility.
Broder explained that the decision to redevelop this property was based on a lack in Orange County of land suitable for development, particularly for an 8.5-acre rectangle parcel, as well as a need for more industrial space.
There are not many sites available that fit this criteria. Broder told L.A. Business First that available land was scarce, if not non-existent. There is a high demand for warehouses and a shortage of supply. The opposite, however, is true for offices. There aren't many tenants looking for office space due to the work-from home and pandemic trends. It was a good opportunity to switch to industrial redevelopment.
Orange County's submarket for industrial properties saw a vacancy rate of less than 1% in Q4 2020, according to CBRE. Leasing rates have also increased by more than 18% over the past year.
Broder stated that Santa Ana had been very supportive to our plans. The property is already zoned as industrial, so we expect a smooth approval. We look forward to bringing an industrial product that is well located and modern to a market with a severe lack of supply.
Kearny is responsible for the development and management of more than 12,000,000 square feet of industrial spaces in Southern California. Two projects, totaling 1.2,000,000 square feet, in Torrance, California and Corona, California will be completed within the next month. The company also redeveloped the 2.6-million-square-foot Century Business Center, which is home to SpaceX, in Hawthorne.