Oxnard Developer Finds New Life for Vacated Aerospace Plant
One of the signs of Ventura County’s struggling economy in the early 1990s was the closure of the Abex Aerospace plant near Oxnard Airport.
Relocation of the plant operation to Michigan in 1993 left more than 500 workers unemployed and created a 184,000-square-foot vacancy at what was once Oxnard’s largest employer.
The facility has remained empty since the day Abex shut its doors. And with environmental issues related to the large property, it has been a hard sell to would-be buyers.
But the building is about to come to life again.
In what may signal a reversal of the county’s economic woes, Oxnard-based developer F & A Realty Advisors has purchased the property for $2.4 million.
The building cleared escrow earlier this month, and the new owners expect to have it fully occupied by mid-August.
“I see this area as definitely recovering,” said Dick Fausset, a partner in F & A Realty Advisors, part of Fausset & Associates, which established the F & A Airport Commerce Center limited partnership to purchase the property. “We wouldn’t have gone after this if we didn’t feel there was an opportunity to lease the building.”
F & A Realty Advisors--made up of Fausset, son Rick Fausset, and businessman Jack Neely--has already leased 103,000 square feet of the building to Commonwealth Inc., a Cincinnati-based warehousing and distribution company that will operate a contract warehouse on the site, sublease a portion of its space to the Hoskins Bros. trucking company of Oxnard and save the remaining space for public storage.
Another 25,000 square feet of the building has been designated as office space and 30,000 square feet will be used by an industrial operation. Negotiations are underway with businesses seeking to lease the remaining space.
Once renovations are completed, the property, which will be renamed the Airport Commerce Center, will total 176,000 square feet.
“This represents the type of property we’ve been looking for--buying property at substantially below replacement costs, something that is well located, with substantial economic [potential],” Fausset said. “We secured a major lease before we closed escrow and have interest in the balance of the property. I think to take a building of that size and be able to lease it up that quickly is a significant event.”
For F & A Realty Advisors, developing a property in its own backyard is a welcome change of pace. In the past few years, the company has concentrated much of its money on properties out of state.
“My son and I have been involved with [developing] distressed properties in Dallas and later in Houston,” Fausset said. “We just kind of gave up on the opportunities here. We’ve continued to look here, but it’s difficult to find what we’ve found in the Dallas market.”
What Fausset and his partners found in the Southwest was an area saturated by overdevelopment from the 1980s.
“What they had was an enormous overbuilding and then they had the oil crunch and then a collapse,” he said. “For a very long period of time they had a flat, depressed market. We were fortunate to get into the market just as it started to firm.”
That market situation resulted in some successful deals, Fausset said.
The firm purchased one 76,000-square-foot office building for $33 per square foot and sold it three years later for $71 per square foot. Another building, a 230,000-square-foot facility that the partnership purchased for $15 per square foot 18 months ago, is in escrow and ready to sell for $35 per square foot.
Fausset said the Abex building presents a similar opportunity, even with the renovations that need to be done to turn the place into a warehouse and distribution center.
“We paid less than $14 a square foot and got 14 acres of land free,” he said.
Although the purchase made a lot of sense to the partners of F & A Realty Advisors, its time on the market illustrated the challenge that faced Daum Commercial Real Estate Services, the Los Angeles-based real estate company that represented the seller, MCG Intermediate Holdings of New York.
“It was a challenging assignment partially because it was environmentally challenged,” said Bram White, who teamed with Ed Rouse to represent the seller, part of the MacAndrews & Forbes Holdings conglomerate.
A recycling and reclamation project has been set up by the building’s former owner to eliminate a ground water contamination problem.
“That had to be [remedied], and the buyers had to be comfortable about the future of that process,” White said. “One of the things that made Fausset the right buyer is he was local, had the sophistication to understand the environmental conditions, had a knowledge of the local market and had the right people to go to for investors.”
Like Fausset, White sees the transaction as a positive sign for Ventura County’s economy.
“It’s nice to see a building that used to be the source of a number of paychecks in this county be revitalized,” White said. “It’s a sign of recovery, because this was one of the more difficult assignments in the county. There is almost nothing left that’s comparable in terms of a great discounted deal.”
White and Rouse also pointed to the pending sale of the former Northrop Corp. facility in Thousand Oaks, another Daum property, as a sign of economic recovery. The 566,000-square-foot building is in escrow, they said. They declined to give any other details on the transaction.
Paul Farry, vice president of CB Commercial Real Estate, which represented F & A Airport Commerce, was equally pleased with the results of the Abex building transaction.
“Renovation deals only happen when the market has improved,” said Farry, an investor with Fausset on some of his Texas projects. Farry teamed with Jim Meaney, a senior associate at CB Commercial, on the Oxnard negotiations.
“What some people would call a functionally obsolete building is now going to be a functional piece of real estate,” he said. “It will be employing a lot of people and generating a significant amount of business.”
