Buyer Plans to Convert 200,000-SF Knott’s HQ

PLACENTIA, CA-Western Realco LLC of Newport Beach and Connecticut-based Penwood Real Estate Investment Management have acquired the former headquarters of Knott’s Berry Farm and plan to convert the approximately 200,000-square-foot facility into manufacturing and warehouse space before marketing it for sale or lease. The sale of the property, which attracted multiple offers, is one of a number of deals that underscore increased activity in the industrial sector in North Orange County, according to Ian Britton, one of a team of CB Richard Ellis brokers who represented the Knott Family Co. in the transaction.

Built in and owned by the Knott family since 1985, the building sits on 12 acres at 200 Boysenberry Lane and served as the production facility for Knott's jams and preserves for over 15 years. The highly specialized facility has a long history of jam production, first by Knott’s and later by Conagra and Smuckers, according to Britton, whose CBRE partners in the approximately $10.3 million sale were Ben Seybold and Art Rasmussen. The buyers were represented by EVP Jeff Read of Grubb & Ellis Co., who notes that the building includes corporate-image office space, two acres of excess land and a secured yard close to the 57 and 91 freeways.

Read and his partner, VP Greg Osborne, will continue to represent Western Realco in marketing 200 Boysenberry for sale or lease. Western Realco plans to renovate and convert the property into more traditional manufacturing and warehouse space before putting it on the market. The renovations are expected to take approximately three to four months and include the removal of an approximately 35,000-square-foot mezzanine structure.

Britton of CBRE says that the building was originally marketed to food related users throughout the US. Given its specialized improvements, heavy power, extensive sewer capacity and rail service, he says that Western Realco was ultimately selected as the buyer after review of multiple offers made by both investors and users.

“This multiple-offer competition and sale confirms that investment capital for well-located industrial buildings is back in the market as investors continue to compete with one another for very few opportunities,” Britton said. This sale, along with two other recently completed lease transactions in North Orange County above 100,000 square feet, will take over 600,000 square feet of industrial space off market this quarter, he noted. “This is the most activity we have seen above 100,000 square feet in over two years and suggests that the market is stabilizing,” Britton added.

Read points out that Western Realco “has been one of the most active industrial developers and investors in Orange County over the past 18 months.” In July 2009, the company acquired a 15-acre manufacturing site in Fullerton, located approximately four miles west of the Boysenberry Lane property, then sold the property in February 2010, with Read and Osborne representing Western Realco in both transactions. The aggregate value of those two transactions combined with the purchase of 200 Boysenberry Lane is in excess of $40 million.

Jeremy Mape of Western Realco notes that the company plans to remain active in the Orange County industrial marketplace. “We will continue to seek strategic, value-add industrial opportunities to take advantage of the strengthening real estate fundamentals in Southern California,” he said.