News Summary
Steiner Investments has purchased a 35,500-square-foot building in Irvine, leased to Tesla for $21 million. This acquisition highlights the ongoing interest in industrial real estate, despite a slowdown in the Orange County market. The property features a triple-net lease structure and is strategically located near John Wayne Airport. Planned renovations for the building are set to enhance Tesla’s operations, underscoring the appeal of long-term tenants amid current economic challenges in the industrial sector.
Irvine – Steiner Investments, a Costa Mesa-based 1031 exchange investor, successfully acquired a 35,500-square-foot building located at 18011 Mitchell S. in Irvine, fully leased to the electric automotive giant, Tesla Inc., for $21 million. The transaction, which closed on May 28, equates to $592 per square foot.
The building, which was previously owned by North Palisade Partners, a Los Angeles-based real estate development and investment firm, has been leased to Tesla as a collision repair center since shortly after North Palisade’s acquisition in 2022. The property, situated on a 2.4-acre parcel in the Irvine Business Complex, is approximately two miles from John Wayne Airport.
Steiner Investments was drawn to this acquisition due to Tesla’s long-term lease commitment and the property’s triple-net lease structure, which places the financial responsibility for property taxes, insurance, and maintenance directly on the tenant. Planned renovations for the building are set to take place in 2024, including a new roof and an office build-out.
The single-story facility, built in 1976, features 14-foot ceilings and has space designated for additional research and development activities, complementing Tesla’s operations at the site. In recent years, Tesla has emerged as a key player in the automotive industry, with its Model Y and Model 3 being the two most popular vehicles sold in California last year. As of the latest reports, Tesla holds the title of the world’s most valuable car manufacturer, boasting a market capitalization nearing $1 trillion.
The sale of the Mitchell S. property is noteworthy in the current industrial real estate landscape, although it did not set any new records. It significantly exceeded the selling prices of several larger industrial buildings that have recently sold for amounts below the $21 million mark. Other notable recent transactions in Orange County include the acquisition of a 60,000-square-foot property by Terra Universal for $12.5 million in Fullerton, and Products Go LLC’s purchase of a 55,300-square-foot facility for $18.1 million in Buena Park.
Despite these transactions, the overall market for industrial properties in Orange County has been experiencing a slowdown. A comprehensive market analysis has indicated that the average asking price for industrial properties has fallen to $378 per square foot, down from $389 per square foot reported in the fourth quarter of 2024. Additionally, the year-over-year average sales price for industrial buildings dropped by 7.84%.
Factors contributing to this downturn include current high mortgage interest rates, which are affecting potential buyers across the market. This change in the economic landscape has made it more challenging for investors to enter the industrial property market, impacting sales and asking prices alike.
In summary, Steiner Investments’ acquisition of the Tesla-leased property signals continued interest in industrial real estate, even as the Orange County market faces headwinds. The strategic appeal of long-term, reliable tenants like Tesla may continue to drive investment interest in such properties despite broader market challenges.
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Additional Resources
- OC Business Journal: Costa Mesa Firm Buys Building Leased by Tesla
- Wikipedia: Tesla, Inc.
- OC Business Journal: Irvine Building with Tesla as Tenant Sells for $21 Million
- Google Search: Industrial Real Estate Orange County
- Encyclopedia Britannica: Real Estate
Author: STAFF HERE COSTA MESA
The Costa Mesa Staff Writer represents the experienced team at HERECostaMesa.com, your go-to source for actionable local news and information in Costa Mesa, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the OC Fair, performances at the Pacific Amphitheatre, and community gatherings at The LAB Anti-Mall. Our coverage extends to key organizations like the Costa Mesa Chamber of Commerce and Visit Costa Mesa, plus leading businesses in retail, entertainment, and innovation that shape the local economy. As part of the broader HERE network, including HEREAnaheim.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
