Home Depot to Buy, Develop Irvine Site
Home Depot Inc., quickly expanding its interior design concept, has agreed to buy a 42-acre Irvine site, where it will erect a new Expo Design Center and may develop the rest for other stores or offices.
The giant home improvement chain is buying the aerospace headquarters of Parker Hannifin Corp., which has begun moving its 500 employees into other Orange County offices it occupies.
Neither Home Depot nor Parker Hannifin would comment, but according to documents obtained by The Times, the sale is in escrow and is expected to close in September.
The site, on prime land off the San Diego Freeway and Jamboree Road with an estimated value of $58 million, would fit into the retailer’s plans for locating its showrooms in more affluent areas.
The company opened three other Expo Design Centers this month in San Diego, Monrovia and Huntington Beach and is planning another in Laguna Niguel, real estate brokers said.
“Home Depot is looking to be in higher-end areas,” said Ian Brown, a Grubb & Ellis Inc. retail broker who is not involved in the deal. “You can’t do much better than the border of Newport Beach and Irvine.”
Just as Home Depot and its warehouse competitors reinvented the home improvement industry, the Atlanta-based company hopes its Expo chain can offer do-it-yourself remodels that are not dependent on contractors and decorators.
The company, which opened its 1,000th store this week, continues to expand aggressively in California, where it has 126 stores, including 13 in Orange County. Five more stores are scheduled to open in the state within the next three months.
The chain has more than doubled its number of locations since 1997 thanks to a robust economy and a runaway housing market. Not only have home purchases resulted in fix-up projects for new owners, but others who haven’t moved also are redoing their homes.
“Even when the economy slows down a bit, you’re always going to have people fixing up their homes,” said Jack Kyser of the Los Angeles County Economic Corp.
The company expects to have 1,900 stores in North and South America within three years.
With sales of more than $38 billion last year, Home Depot has never been stronger in the $150-billion U.S. home improvement market, said Budd Bugatch, an analyst with Raymond James in St. Petersburg, Fla.
“I can’t think of many companies that stand higher or have a better future,” Bugatch said. “They are a very, very interesting and well-run company. They have a lot of growth initiatives underway, and they take them in very measured fashion.”
Kyser said Home Depot, which employs 226,000 people, including 12,000 in Southern California, ranked 30th in the most recent survey of the largest employers in the five-county Southern California area, consisting of Los Angeles, Orange, Riverside, Ventura and San Bernardino counties.
The transaction follows an effort earlier this year by a group of Orange County executives to buy the property for more than $50 million and create a huge high-tech incubator. But the deal fell through when executives at EDevelopments decided to launch a less expensive version of their plan in Aliso Viejo.
