Land for industrial development in North County appears to be rapidly dwindling, particularly for companies looking to build facilities on large tracts of land.
Steve Willhite, senior vice president at Grubb & Ellis’ San Diego office, said there isn’t much land left at all within San Diego city limits. North County cities such as Oceanside and Carlsbad are “the only place where you can buy land at a lower cost, with lower home prices, still at a reasonable rate.”
Willhite said there are still some large tracts in inland areas, like Vista and Rancho Bernardo. “There will be centrally located properties, but not on the same scale,” he added.
An option in Oceanside is the 400-acre Ocean Ranch Corporate Center, which will be composed of light industrial and office development, at Rancho Del Oro Road and Oceanside Boulevard. Laguna Hills-based Stirling Development is the developer, and purchased the Ocean Ranch property with Ivey Ranch Development Co. LLC.
Idec Pharmaceuticals, headquartered in La Jolla, has purchased a 60-acre site in Ocean Ranch. Idec plans to build a $1.25 billion, 1.8 million-square-foot manufacturing and research complex, according to David Onosko, senior vice president at Coldwell Banker Commercial North County Properties and a broker for Ocean Ranch.
– Buying Into Ocean Ranch
Idec plans to break ground in February and may begin to move employees to Oceanside in third quarter of 2003, according to Jane McVey, Oceanside’s economic development director. Idec has an option to buy two lots totaling 17 acres to the north of its site.
At 400 acres, Ocean Ranch is the largest development of its kind in San Diego County.
Almost all of Phase I is in escrow and Onosko is working on some build-to-suit facilities for the first phase. “I think we’ll get other companies that want to locate near Idec,” he said.
Ron King, senior vice president at Coldwell Banker Commercial and an office broker for Ocean Ranch, said, “Ocean Ranch is going to be a very special place because of the companies that want to be near Idec. We’re essentially building something like a hospital here.”
“We’ll draw from San Diego and Orange County,” Onosko said. “A lot of the build-to-suits we’re talking to now are in North County but looking for expansion space.”
Two lots, totaling about 37 acres, are being sold to Burke Development in Orange County, which plans to develop 150,000 square feet in multiple buildings for sale or lease.
Orange County-based Palone Brothers, a manufacturer of high-end mufflers and car radios, purchased 11 acres where it will develop a 200,000-square-foot facility.
Onosko says he is in negotiations with a fitness center, day care and several extended-stay hotel operators for another site.
“The (Oceanside-Escondido) light rail line will be operational through the middle of Oceanside, running along the south side of Ocean Ranch,” McVey said.
– Expanding To The North And South
There aren’t many large lots left in Oceanside, McVey said. There are small parcels for smaller multi-tenant buildings, but not much contiguous land for large parcels, she added.
“It’s a reflection of just time and topography. San Diego is built out, so what you have is land available at the northernmost and southernmost point of the county,” McVey said.
Oceanside is in a heavy construction cycle, McVey said, with an average vacancy rate hovering around 7.8 percent. “Our local companies are doing well for the most part and they need space to expand.”
In Carlsbad, Palomar Concourse may soon be an option. In July, Don Grant and Andy Melzer, brokers from San Diego-based Business Real Estate Brokerage Co., represented the buyer of 62 acres for Palomar Concourse. Newport-based Davis Partners LLC bought the property.
The research and development/office park will be built along Palomar Airport Road at Melrose Drive , an intersection the San Diego Association of Governments says will be one of North County’s busiest by 2020.
Grant and Melzer are the R & D;/industrial brokers for sales and leasing at the property. BRE’s Rick Reeder will handle the office leasing. Palomar Concourse will be master-planned for build-to-suit projects for sale or lease.
Grant says the land has been purchased, but Davis Partners has not gotten any development approvals. Up to 750,000 square feet of development could be accommodated on the property.
– Carlsbad May Have More Land
Carlsbad Economic Development Manager Cynthia Haas said 400 to 500 acres potentially could be developed in the city. That figure includes land currently being developed, land that will be ready for development in a few years and land zoned for industrial development, but the owners have not indicated plans to sell it.
“Most business parks are already in place with a few lots available here and there,” Haas said. “There are large chunks of land to be developed into parks, but not large lots for one user, unless you’re combining small lots.”
According to a Coldwell Banker Commercial mid-year report, Carlsbad has 3.1 million square feet for lease. A little less than 300,000 square feet is under construction and many large buildings make up that space, Haas said.
