As SoCal Real Estate recently reported, representatives of The Koll Company say the firm has acquired a 77,000-square-foot flex building at 1361 Valencia Avenue in Tustin, California, and will invest more than $4 million to upgrade the building for a new prospective tenant.
This transaction is one in a recent series of deals taking place in the Tustin market, including, as representatives of Lennar Corporation report, the firm’s groundbreaking on the Levity 218-home residential community in Tustin Legacy; and, as representatives of Ware Malcomb report, construction completion on a 40,000-square-foot, two-story office building at 14201 Franklin Avenue.
We spoke with Scott Lanni, a principal at The Koll Company, about the 1361 Valencia deal, how it fits into the firm’s larger strategy, and the type of tenant he has in mind for this property.
SoCal Real Estate: Do you have a particular tenant or type of tenant in mind for 1361 Valencia once its renovated?
Lanni: The submarket vacancy for this product type is at 1 percent, with plenty of tenant demand. Most likely, it will be a headquarters for a regional company either moving into or expanding in the Orange County market. The flex/R&D nature of the property allow us to target numerous types of tenants requiring a balanced mix of office space, manufacturing space, and high-bay warehouse. We have commenced construction to reposition the property with a modern design incorporating urban landscape, exterior amenities, and an improved office area layout.
How does this acquisition fit into your larger strategy for the Orange County market?
We continue to seek opportunities in Orange County through either underperforming assets or vacant properties with repositioning potential. We prefer the R&D/industrial product type as the market is extremely tight.
What else do you have planned for your Orange County portfolio?
We have invested more than $50M in Orange County commercial real estate in the past six months and will continue to grow our presence here. We also just acquired a 65,000-square-foot office building in Corona on the border of Orange and Riverside Counties. Orange County is our company headquarters; therefore, we will continue to grow in this market.
What other Southern California markets do you see as strong or gaining strength for office or R&D investment?
We continue to stay active in San Diego and Los Angeles as well. The expansion of companies and job growth keep us focused on these two additional markets for investment opportunities.