Distributor Leases Bigger Quarters in Anaheim

Ro-El Enterprises, a distributor of wholesale general merchandise, will relocate its operations to larger headquarters in Anaheim.

In one of the largest such deals this year in Orange County, the company signed a five-year lease valued at $2 million to move to a 104,000-square-foot industrial building at 2891 Miraloma Ave. The company will vacate its 22,000-square-foot headquarters in Placentia in June.

The rent is about 15% less than what the previous tenant, Pace Membership Warehouse, paid when it signed on three years ago, said Jeff Read, industrial properties specialist with Grubb & Ellis’ Anaheim office, which represented Ro-El. It equals about 33 cents a square foot a month, compared to the 39 cents that Pace paid. Even so, it is in line with today’s rates.

“It’s real close to being a market deal,” Read said.

The building is owned by M.S. Partners in Mission Viejo.

Ro-El distributes close-out and promotional consumer merchandise--everything from plastic clothes hangers to Valentine’s Day cards--to retailers and wholesalers like Wal-Mart and Longs Drug Store.

“If we had gone somewhere else (in Orange County) the lease probably would have been cheaper,” said Larry Siegel, president of the company, which grew by about 35% last year and has about $20 million in sales. “But this is a state-of-the-art building. We were also impressed by the landlord.”

The deal is one of the larger transactions of industrial property in an otherwise tepid market for commercial real estate this year. While brokers have reported brisk activity in the first quarter, most are from companies taking advantage of lower lease rates. Sales of industrial sites have been slow, Read said.

M.S. Partners was represented by Grubb & Ellis in Irvine.