Posts Tagged ‘Orange County’

Inland Empire Poised for Industrial Comeback

Wednesday, July 22nd, 2009

Over the past decade, California’s Inland Empire has been transformed from a little-known region with affordable housing and lots of inexpensive land into an industrial hub – thanks to its proximity to the busy Ports of Los Angeles and Long Beach.  With the City of Ontario embarking on The Ontario Plan, sciearmalogo2city fathers are laying the groundwork for increased investment over the next 30 to 40 years.  The plan’s goal is to create an all-inclusive community where people and businesses will want to be.

According to Mary Jane Olhasso, economic development director for the City of Ontario, “Although firms are pulling back, they still realize that the region has competitive advantages over our coastal neighbors.  In Ontario, both industrial and office lease rates are lower than Los Angeles and Orange County.”

The Inland Empire’s industrial market is in a prime position to recover when the economy improves because the region is notable for its relatively low-cost housing, large workforce and vital location relative to international shipping.  With 40 percent of all containerized cargo entering the United States through Southern California ports, the Inland Empire is the logical location for gigantic distribution centers to handle the freight prior to shipping it throughout the United States.

FDIC Walking Away from Leases of Failed Banks

Friday, June 26th, 2009

Troubled Los Angeles-based office REIT Maguire Properties is facing default and currently is in discussions with a special servicer to resolve its financial woes.  The goal is to have the special servicer take over Maguire’s $106 million CMBS financing covering the Quintana office campus it owns in Orange County, CA.  fdic-moneyThe campus’s major tenant was Washington Mutual Bank, which failed last year.

As receiver for WaMu, the Federal Deposit Insurance Company (FDIC) gave up its majority of the Quintana lease effective in March and does not have to pay rent or other compensation connected to the lease termination.  A little-known provision  gives the Federal Deposit Insurance Corporation (FDIC) the authority to break leases between the bank and the landlord once a financial institution has been taken over.  One side effect of this provision could be that we’ll see fewer branch banks in the future as the FDIC breaks additional leases inked by failed banks.

As a result of the FDIC’s ending the lease, the Quintana campus’ occupancy was reduced approximately 250,000 SF to 40 percent.  According to Nelson C. Rising, Maguire’s president and CEO, the FDIC’s rejection of the leases was “a highly unusual and unfortunate event.”