Rexford Industrial Realty has bought the 81,600-square-foot headquarters for Fox Racing in Irvine for $40 million.
The Sawtelle-based real estate investment trust acquired the office and warehouse building at 16752 Armstrong Avenue, the Orange County Business Journal reported. The price came out to $140 per foot.
The seller was Griffin Realty Trust, based in El Segundo, which paid $27.3 million for the property in 2013.
Fox, a retailer of motocross and mountain bike gear, has occupied the 6.4-acre site since it was developed in 2012. The office campus, revamped a year ago at a cost of $1.5 million, has a motorcycle and bicycle pump track, as well as a Fox history museum and store.
The apparel company was bought by Minnesota-based Vista Outdoor in August for $540 million. It employs 420 people, including an estimated 110 workers in Irvine.
Its Irvine lease expires at the end of 2027, property records indicate, with two five-year extension options.
Brokers Paul Jones, Kevin Shannon, Bret Hardy, Ken White and Brandon White of Newmark represented the seller.
When Fox’s lease ends, Rexford aims to redevelop the site into a Class-A logistics warehouse, similar to other conversion projects in the Orange County region. The industrial property formerly hosted a warehouse.
“I remember when we were tearing Irvine’s industrial buildings down to build offices,” Jones told the Business Journal. “Now it has flipped.”
Rexford and other developers looking to boost Irvine’s industrial inventory may face another hurdle soon in securing approvals because of a new city requirement for a conditional use permit for all logistics facilities or warehouses that are 100,000 square feet or larger.
The change is the result of the city’s concern over land use, as demand has prompted new industrial developments to pop up in or near residential neighborhoods. The measure was approved by the city’s Planning Commission late last year.
Development projects approved prior to the ordinance passing are grandfathered, while new proposals may be subject to the new requirements.
“The city will have full discretion over what developers can build, which adds a much more complex layer of risk for an already risky business,” Steve Wagner of JLL told the newspaper. “If implemented, speculative industrial development in Irvine may come to a screeching halt.”
Irvine’s industrial vacancy rate was 1.3 percent during the third quarter of last year, according to Voit Real Estate Services. That’s up from less than 1 percent during the same period in 2021.
Rexford spent $2 billion on warehouses, logistics and manufacturing properties in the first nine months of last year, including $338.9 million on seven properties from July through the first week of September.
— Dana Bartholomew
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