Rising County Land Values Turn Industrial Park Into Retail Center : REAL ESTATE

Yet another Orange County industrial park is becoming a retail center as land values rise and push less profitable factories out of the county.

This one is McFadden Commerce Center in Santa Ana, which was once an industrial park of nine low-rise buildings.

With a new ramp of the Costa Mesa freeway going in nearby, it has become too valuable a site for factories.

Now it’s home furnishings instead of assembly lines. Already moved in are the Office Club, an office furniture supplier; Bova-USA, a Scandinavian furniture store, and Carpets of New Zealand.

“What’s happened is that property values have increased so much in the county that it doesn’t make sense to have industrial buildings on ground this valuable,” said Ian Brown, a Grubb & Ellis broker who is leasing the center.

“One of the hottest things around is finding an old industrial building with good access to a freeway and converting it to retail or even offices.”

So far the Gardner Group, a Century City developer in partnership with what Gardner described as several major pension funds, has renovated two of the center’s buildings. The first is about 80% leased; the second was just finished. All nine buildings total 308,000 square feet.

Said Brown, who works out of the brokerage’s Newport Beach offices: “It’s tough to find industrial buildings from here on south.”