Significant Sale, Lease Deals Close in Cypress

[IMGCAP(1)]

CYPRESS, CA-Cypress is the focus of two significant transactions that recently took place. Colony Realty Partners has sold Cypress Distribution Center at 6550 Katella Ave. and 1110 Holder St. here to Stockbridge for $60 million. In addition, DRS Sensors and Targeting Systems, a division of DRS Technologies, a multi-billion-dollar global defense and technology company, has signed an 11-year, $14-million lease renewal for 91,500 square feet at 10600 Valley View St. here.

Cypress Distribution Center, a class-A industrial project, sold for what equated to $111.30 per square foot. The property is located in the mid-counties industrial market of Southern California, a low-vacancy, infill submarket. The project includes two buildings that are separately parceled and feature a business-park environment. Tenants at the center include Empire Warehousing, ILAD, VF Outdoor Inc. (Vans) and Integrated Alarm Services. The project has access to five major freeways within a 5-mile radius and is surrounded by an abundance of retail, service, recreation and hotel amenities.

CBRE's Kevin Shannon, Darla Longo and Barbara Emmons represented the seller, along with Cushman & Wakefield's Rick Ellison and Tom Sheets. "This property's stable income stream, combined with the strong dynamics of this mid-counties area—which is arguably the most active and tightest market in the US—made it attractive to the investment community," says Emmons. "We believe this area has even more room for growth in terms of lease rates as the demand for industrial space continues to be limited in the area."

[IMGCAP(2)]

As for the lease renewal, the Saywitz Co. negotiated the transaction on behalf of the tenant. The landlord, Warland Investments, was represented by Brian DeRevere of CBRE. "DRS' commitment to their continued operations here in Southern California is another example of the vibrant economy and opportunity for DRS' business, says Barry Saywitz, president of the Saywitz Co. "The new lease agreement affords DRS the ability to upgrade the facility and to accommodate its business operations on a going-forward basis."

DRS' site selection for alternative opportunities included a wide geographical area throughout Orange County and, says Saywitz, "at the end of the day, the benefits of geographical location of the current facility combined with the economic terms and conditions proved to be the overall best option for our client. This transaction will undoubtedly be a 'win-win' for both landlord and tenant."

Long-term lease deals are not uncommon in Cypress. As GlobeSt.com reported exclusively in November 2013, American Honda Finance Corp. has signed an 11-year, $6.5-million office lease with landlord Buzz Oates LLC. The agreement is for approximately 26,000 square feet on the ground floor of 10801 Walker St., a 108,000-square-foot, class-A office building here.