Sares Regis Signs 434 KSF Orange County Tenant

Huntington Gateway Building 2. Rendering courtesy of Newmark.

Sares Regis Group has preleased an entire building at its upcoming 1 million-square-foot industrial development, Huntington Gateway Business Park Phase II, in Huntington Beach, Calif. Cambro Manufacturing signed on to occupy the second building of the project, with a total lease consideration of more than $65 million.

The food service product manufacturer has been active for over 70 years in Huntington Beach—where it operates two other facilities—and is seeking to consolidate its warehouse operations from its present location in City of Industry, Calif. Newmark’s Senior Managing Directors Wes Hunnicutt and Matt Moore represented Cambro in leasing negotiations.

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A separate Newmark team, comprising Executive Managing Directors Jeff Read and Scott Read and Managing Director Greg Osborne, represented Sares Regis.

Years in the making

In 2018, Sares Regis Group acquired a property of roughly 30 acres from Boeing for nearly $72.8 million, Orange County Business Journal reported at the time. The next year, the developer received approval to construct three new industrial buildings on the site, totaling more than 610,000 square feet, according to the City of Huntington Beach’s website. This project is the first phase of the Huntington Gateway Business Park, currently under construction at 14900 Bolsa Chica St. CommercialEdge shows Comerica Bank is backing the project with an $85 million construction loan originated last year. It is expected to deliver later this year.

Sares Regis submitted an application to develop Huntington Gateway Business Park Phase II in 2020. This second phase is located on a 56-acre lot, which the developer acquired from Boeing in 2019. CommercialEdge data shows the developer paid $113 million for two properties at 5301 Bolsa Ave., which coincides with the address submitted in its project application to local authorities. The second phase is slated for a 2022 completion.

Orange County’s appeal

Building 2, which will house Cambro Manufacturing’s operations, totals 433,865 square feet, the largest of the five structured planned within the second phase. The remaining four buildings will range from 109,892 square feet to 233,706 square feet. Building 2 will feature 32-foot clear heights and an office component of up to 15,000 square feet. Plans for Huntington Gateway Business Park’s second phase call for a parking ratio of 2 spaces per 1,000 square feet.

The industrial development is located 2 miles off Interstate 405, within a 30-mile radius of both the ports of Long Beach and Los Angeles. Cambro Manufacturing’s consolidated location will allow for significant savings on interfacility transport costs among other efficiency-related benefits, noted Hunnicutt in a prepared statement.

As neighboring markets like Los Angeles and the Inland Empire are becoming more supply-constrained, Orange County is becoming more desirable. As of July, rents for industrial properties in Orange County grew by 3.3 percent year-over-year, the latest CommercialEdge report shows, while vacancies reached 4 percent—among the lowest in the nation.

Sares Regis is also active in the Los Angeles market, which experienced the second-fastest rent growth in the country as of July, at 6.4 percent year-over-year, the same report shows. The company is currently developing the second phase of Torrance Commerce Center in Torrance, Calif., a 615,000-square-foot project on the former site of Toyota’s headquarters.