Lowe Closes Sale-Leaseback for 260,000-SF Development

FULLERTON, CA-Lowe Enterprises plans to develop 260,000 sf of small industrial buildings for sale on a 15-acre site that the Los Angeles-based development and investment firm acquired recently from Johnson Controls Battery Group. Johnson Controls, which has operated an 182,966-sf automotive and marine battery manufacturing facility for many years, will lease back the property for at least one year.During the period of the leaseback, Johnson will demolish the existing structures and complete environmental remediation work to create a clean site to Lowe for the new development, says Rick Newman, president of Lowe Enterprises Real Estate Group's western region. Newman says Lowe's new buildings will serve the strong and growing demand for industrial space in North Orange County, where development sites are scarce.Newman notes that Lowe closed on the transaction in two weeks, thanks to completing its due diligence quickly and its familiarity with environmental clean-up requirements. The quick close was necessary to meet the seller's need to complete the sale before the end of its fiscal year, he adds.The Lowe development site, at 1550 Kimberly Ave., is bounded by Raymond Avenue and Acacia Street in the heart of the North Orange County industrial market near the 91, 57 and 5 freeways. Lowe will offer buildings for sale ranging from 7,500 sf to 15,000 sf, with architect Ware Malcomb devising site plans that could accommodate up to 24 buildings totaling 260,000 sf.Development sites have become even harder to find recently because local zoning changes designed to increase housing inventory have converted some traditionally industrial areas into residential, points out Mike McNerney, SVP of Lowe Enterprises Real Estate Group. The new buildings will be designed to accommodate office uses along with warehousing and light manufacturing, with grade-level loading and clear heights of 18 to 24 feet.Lowe Enterprises expects to start construction in fall 2006 with completion estimated for fall 2007.