HUNTINGTON BEACH, CA-Shea Properties has kicked off its program to increase significantly its industrial portfolio by planning to build a two-building, state-of-the-art industrial center totaling 144,460 square feet at the former site of the Randall Lumber Co. here. Located at 17322 Gothard St., between Slater and Warner aves., Shea Center Huntington Beach will be constructed to CALGreen standards.

Mike Bouma and Mitch Zehner of Voit Real Estate Services represented the seller of the 6.5-acre lot, while Bob Godmanson and Chris Bates of CBRE represented Shea on the purchase and will continue to represent it on marketing the property.

Once constructed, both buildings will have the potential for fenced yards, up to 30-ft. clear heights, multiple dock-high and ground-level loading doors and ESFR sprinkler systems. With a planned parking ratio of 1.7:1,000 the center will also be able to accommodate above-average parking requirements.

The acquisition allows the Aliso Viejo-based firm—which has focused on the acquisition, design, development, construction and management of business parks, shopping centers, apartment communities and mixed-use environments—to expand its industrial portfolio in a meaningful way, according to Jon Marchiorlatti, VP of industrial acquisitions and development for Shea Properties. “Over the last few months, we have been looking for the right properties on which to develop, and we think this site in Huntington Beach will prove to be very successful. Again, it signals our intent to continue to search for suitable sites on which to build even more industrial product.”

What makes this particular project unique and appealing for Shea is its location, Marchiorlatti tells GlobeSt.com. “The new industrial property is in the middle of the county, near transportation and close enough to the Port of Long Beach. There's also a lack of new class-A industrial product in Huntington Beach. We consider Shea Center Huntington Beach a quality, long-term-hold property.”

While Marchiorlatti declined to reveal the construction costs for the project, he says it should be ready for occupancy in the second quarter of 2014. He tells GlobeSt.com that the firm is choosing now as the right time to move further into the industrial arena for two reasons. “First, the timing is right. Although the office market is still trying to soak up some of that vacant space, the industrial market is expanding. We've seen some interest from large users again, which is very encouraging. Secondly, Shea Properties feels it's important to diversify its portfolio. Our goal is to have a well-rounded collection of properties in the apartments, retail, office andindustrial markets.”

The industrial market is viable because it combines long-term income with low reoccurring capital costs for releasing, Marchiorlatti adds. “Unlike the office market, where tenants can come and go, industrial tenants tend to stay put longer.”

Currently active in the multifamily and retail markets, Shea just opened 280 apartment units at the Artisan in Oxnard and is under construction on 200 units in Milpitas and 650 units in San Jose. “In Colorado, we recently opened 277 units at Zenith Meridian, and we're under development with three additional communities there,” says Marchiorlatti.

On the retail side, the firm recently opened Mercado del Barrio in San Diego and a 650,000-square-foot outdoor center anchored by Whole Foods, REI, Target, Century Theatres and H&M. “All told, Shea Properties has close to a billion dollars in development projects underway,” says Marchiorlatti.

As GlobeSt.com reported last week, as industrial vacancies continue to tighten, with the potential to dip below the lows of 3.8% reached in the late 1990s and early 2000, growth in the high-tech manufacturing sector could bring this number even lower, according to Jeff Ingham, senior managing director for Jones Lang LaSalle.