Ingram Micro Signs Lease for New Space in Santa Ana : Real estate: The build-to-suit transaction is becoming more common in Orange County’s overbuilt office market.


Ingram Micro Inc., the large distributor of computer products, signed an $18-million lease for 215,000 square feet in two “build-to-suit” structures Santa Ana that will serve as the company’s headquarters and warehouse.

It was one of the largest leases--in terms of space--signed recently in Orange County.

The build-to-suit transaction--where the developer doesn’t build until a tenant is signed up--probably will become more common in Orange County’s overbuilt office market. Many buildings had previously been constructed on speculation, with no specific tenant in mind, leading to a wave of overbuilding, high vacancy rates and low rents.

Catellus Development Corp. will begin construction of the two-story buildings in May and is scheduled to finish in March, 1992. Catellus owns the 123-acre PacifiCenter Santa Ana at Edinger and Grand avenues near the Costa Mesa Freeway, where the buildings will be constructed.


Ingram Micro’s business is growing fast, and the company says it needs additional space. It will leave three leased office buildings around Santa Ana, including corporate headquarters at 2801 Yale St., totaling about 80,000 square feet for the 115,000 square feet in the new building. The new warehouse and distribution center is 100,000 square feet. The company employs 700 in Santa Ana.

“Finding adequate work space for our people has been a challenge,” said Ingram Micro Chairman Chip Lacy.

Ingram Micro, formerly known as Ingram Micro D, is the nation’s largest distributor of computer products. The privately held company said it had sales last year of $1.45 billion.

The company didn’t look outside Orange County in its year-and-a-half search for a new headquarters but studied several sites around the county, including some existing buildings.


“There were a lot of choices for them, but Ingram Micro would have had to alter their requirements” to fit into them, said Bruce Ibbetson, Catellus’ project manager.

Sources said Catellus was eager to land Ingram Micro and negotiated a good deal, with rents lower than average. Neither company would disclose details of the 10-year lease.

“Ingram Micro is a big enough tenant that Catellus wanted them a lot,” said Bradley Schroth, a Grubb & Ellis Co. broker who represented Ingram Micro.

Catellus, until recently part of Santa Fe Pacific Corp., the railroad holding company, has been developing the PacifiCenter business park for more than five years. With the market soft for all types of real estate, including “research and industrial space"--a combination of light manufacturing and office space--Catellus had a strong incentive to land a big tenant such as Ingram Micro, real estate experts said.

Catellus finished three research and development buildings at the park in August that still don’t have tenants, although the company says it is close to some deals. That’s not an extraordinarily long time for a new research and development building to take to rent, experts said, but it was another sign of the soft market that probably helped persuade Catellus to offer Ingram Micro a good deal.

Already in the park is a McDonnell-Douglas electronics unit in a 365,000-square-foot building next to the Ingram Micro site.

While the park is not one of the county’s more prestigious addresses, it appeals to companies like Ingram Micro because it offers proximity to the office towers around John Wayne airport and to the blue-collar neighborhoods in that part of southeastern Santa Ana.

Catellus was the old real estate development arm of the Santa Fe Pacific railroad but recently parted ways with the railroad when it spun off and became a public company. It owns about 2 million acres in California, most of it old railroad land.


The railroad had been selling land but now Catellus says it will hold onto the land and the buildings it has developed, mostly industrial buildings, in order to strengthen its portfolio.