Knott Family Sells Placentia Building
REAL ESTATE: Sale is latest in string of industiral deals
From the Orange County Business Journal
Issue Date: 11/7/10
Newport Beach-based developer Western Realco LLC is hoping to catch lightning in a bottle again after making its second big industrial acquisition in North Orange County in as many years.
The company—which last year bought a Fullerton plant previously used by Chicago-based cardboard box maker Smurfit-Stone Container Corp.—just acquired a 200,000-square-foot food plant in Placentia.
Western Realco paid about $10.3 million, or $51 per square foot, for its latest investment at 200 Boysenberry Lane.
The 12-acre site long served as a production facility for Knott’s Berry Farm jams and preserves, and previously was the headquarters for the food-making arm of the theme park operator.
The Knott family sold the building, which is near the Orange (57) Freeway. It’s one of the largest industrial sales in Placentia in several years and the latest sizable deal in the resurgent North County industrial market, according to brokers who worked on the sale.
There’s been close to $70 million worth of big leases and sales in North County in the past month, taking up close to 700,000 square feet of empty industrial buildings, primarily in Anaheim.
That’s the most activity in the area for buildings of 100,000 square feet or larger in more than two years, and “suggests that the market is stabilizing,” said Ian Britton, a first vice president with the Anaheim office of CB Richard Ellis Group Inc.
Part of the market’s rebound is due to a drop in prices by 30% to 40% from peak levels, said Grubb & Ellis Co. executive vice president Jeff Read, who represented Western Realco in the acquisition.
True to the Boysenberry street name, the Placentia building counts a long history of jam production.
It was one of a few commercial buildings in the area that the Knott family still owned, according to Britton, who along with CB Richard Ellis’ Ben Seybold and Art Rasmussen represented Knott Family Co. in the sale.
The family put up the building in 1985 and used it for its own jam operations for more than 10 years. The building later was leased to ConAgra Foods Inc., which made jams under the Knott’s Berry Farm name.
Ohio’s J.M. Smucker Co. bought the business from ConAgra in 2008 and closed the Placentia plant.
After first marketing the space to other food makers, the Knott family opted to put the building on the market rather than spend a few million dollars to make it more appealing to non-food companies.
Western Realco plans to renovate the building in the next few months to make it suitable for distribution or standard manufacturing, company officials said.
The biggest change to the building is set to be the removal of a 35,000-square-foot mezzanine structure that was used by jam makers, said Gary Edwards, principal for Western Realco.
“There’s a wide array of manufacturers that could be interested” in the building, Edwards said.
The site also counts 12,000 square feet of office space.
The new owner plans to lease or sell the building once some renovations are made.
Grubb & Ellis’ Read and Greg Osborne, both of the brokerage’s Orange office, will handle marketing for the building.
Western Realco is looking to repeat its experience with its last area investment.
In mid-2009, the company and a partner paid $8.3 million for the 15-acre former Smurfit Stone property in Fullerton near the Riverside (91) Freeway.
The building was bought by the developer out of bankruptcy. It had been expected to sell for more than $17 million before falling real estate values knocked down its price.
Earlier this year, Western Realco sold the Fullerton property, which counts a 140,000-square-foot plant and a 40,000-square-foot office building, for about $12.3 million, getting a nearly 50% return on its investment.
Carson-based South Coast Transportation & Distribution Inc., which provides trucking, warehousing and logistics services, bought the site and moved its headquarters to Fullerton.
“We’d love to duplicate that” type of quick return with the Placentia facility, Edwards said.
The company’s prepared to be a longer-term owner if needed, he said.
As in the Fullerton buy, Western Realco’s financial partner on the Placentia deal was Hartford, Conn.-based Penwood Real Estate Investment Management.
Western Realco has built more than 100 buildings accounting for 15 million square feet in the past 35 years.
Until the two recent OC deals, the company had been focusing on big distribution facilities in the Inland Empire.