Orange County businesses drive uptick in industrial building buys

Southern California users purchase buildings to gain control

By Jesse Gundersheim

CoStar Analytics

September 25, 2025 | 12:25 P.M.

Owner-user purchases of industrial properties in Orange County have climbed this year as a growing number of businesses moved to secure long-term space needs. With the year-to-date deal count approaching 40 as of September, more user acquisitions have already closed in 2025 compared to annual totals in 2023 and 2024, and user acquisition sales volume has claimed a new annual high watermark, at $388 million to date, even eclipsing totals from 2020-22.

While institutional investors traditionally favor large single-tenant net-leased distribution hubs, smaller or specialized industrial properties — often better suited for owner-occupiers — are more often purchased by private investors and users. The average building size users acquired for occupancy this year is slightly smaller than 30,000 square feet.

Only two user purchases year to date exceed 100,000 square feet: Walt Disney’s purchase of 1501-1601 E. Cerritos Ave. in Anaheim, a 407,000-square-foot building, for $124 million, or $304 per square foot, and China-based herbal extracts manufacturer Jiaherb's purchase of 2929 E. Imperial Highway, a 131,000-square-foot building in Brea, for $54 million, or $410 per square foot.

A few food companies like Jiaherb, manufacturers, and a handful of construction and materials suppliers, including ABC Supply, RAN Enterprises, Torro Enterprises and Ben's Asphalt, have driven user sales in Orange County this year, locking in capacity for distribution, production and delivery.

Owner-user transactions make up a growing share of sales volume in Orange County's industrial market year to date, at 25%. That’s the highest share taken by users in over a decade. Industrial businesses are prioritizing operational control and predictability, and ownership is an attractive hedge against the potential of higher rents and supply-chain uncertainty. Conversely, year-to-date acquisition volume from private investors is about even with last year's 10-year low, and institutional investor capital placement in Orange County industrial is yet to rally.

The rise in owner-users’ share of investment volume is apparent across Southern California markets. Year to date, users account for 27% of sales volume in the Inland Empire, 26% of volume in Los Angeles, and a 25% share in Orange County. Having experienced above-average rent increases historically and a rent spike in 2020-21, users in Southern California may be more interested in locking in costs and are punching above their weight in an era of heightened logistics importance, driving well more than the 19% national share of sales.

Owning provides users with more predictable long-term occupancy costs, potential tax advantages, and the ability to customize layouts for efficiency and automation. Facilities that offer logistical advantages (near customers, ports, labor pools and established locations) can have the highest utility to users. For example, a 14,000-square-foot building in Anaheim, 1436 W. Santa Ana St., was purchased for $3.3 million, or $236 per square foot, in August by SCL Lubricants, a distributor of petroleum products that was drawn to the property for its proximity to the company's other location in Orange.

User purchases often come at a higher price point, as users exhibit a willingness to pay a premium for certainty of location, operational control and customization. The pricing of user acquisitions in the past year in Orange County averages $359 per square foot, slightly more than the $350 average for investor acquisitions.

User purchases could remain elevated as long as occupiers prioritize supply chain resilience, control over operations and long-term cost predictability over short-term flexibility and capital availability. Increased owner-user buying can tighten investable inventory in certain segments, potentially compressing yields for investors and fueling demand for speculative development.

This article was updated on Sept. 26 to correct the sale price for Walt Disney’s purchase of 1501-1601 E. Cerritos Ave. in Anaheim.