Hines Sells Orange County Industrial Property Housing Amazon

Hines Sells Orange County Industrial Property Housing Amazon

Developer Nearly Doubles Original Purchase Price for Santa Ana Logistics Facility

Investment trust Realty Income Corp. purchased the Santa Ana industrial property in California’s Orange County for $113.5 million. (CoStar)

By Lou Hirsh
CoStar News

January 21, 2021 | 2:13 P.M.

Developer Hines has sold a Santa Ana, California, logistics facility leased by e-commerce giant Amazon for $113.5 million, almost doubling its original purchase price and signaling continued strong industrial demand in Orange County, south of Los Angeles.

Realty Income Corp., a San Diego-based real estate investment trust with a nationwide portfolio of industrial and retail properties, purchased the property at 515 E. Dyer Road, according to CoStar and public data. The 373,942-square-foot property was built in 1954 and renovated in 2018.

Hines purchased it in December 2017 and completed an overhaul that included a new roof, seismic upgrades and office renovations. In the recent sale, Hines garnered a price almost double the $57.1 million or $153 per square foot that it originally paid for the property.

CoStar data shows this is Orange County’s sixth-largest industrial deal on record based on total price, and the $303.72 per-square-foot price was well above the average of $252 paid for industrial properties in Santa Ana during the past 12 months.

Amazon has been leasing the property since February 2020, and its lease runs through January 2035. Over the past five years, e-commerce and other logistics users have steadily been boosting their “last mile” distribution capabilities in the Los Angeles and San Diego regions, along with the adjacent Inland Empire and Orange County.

Houston-based Hines said in a statement that the Dyer Road property is located in a high-demand part of Orange County “where much of this product type is largely being torn down for multifamily development.”

Despite selling the Orange County facility, the developer is looking toward “aggressively expanding” its Southern California industrial portfolio, said Hines regional director Tom Lawless.

CoStar Market Analytics data shows Santa Ana, the government seat of Orange County, maintains a tight 4.7% industrial vacancy rate with steady rent growth in the current climate.

The Santa Ana area has relatively few properties with floor plates large enough to accommodate major industrial users and new development remains scarce, though developer Shea Properties is nearing completion on a nine-building, 500,000-square-foot industrial campus near a former carpet production facility owned by Hine.

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