Sprouts bags largest OC lease this year with 337K sf warehouse

Sprouts Farmers Market may soon fill a newly built warehouse in Orange County with organic spinach, rutabagas, kiwis and other produce.

The Phoenix-based organic grocer has leased a 337,000-square-foot warehouse in a new industrial campus at 1829 East Orangethorpe Avenue in Fullerton, the Orange County Business Journal reported. Financial terms of the lease were not disclosed.

The deal marks the largest lease this year in OC, and makes Sprouts the first major tenant at Goodman Logistics Center Fullerton, north of the 91 Freeway.

The 65-acre campus, built on a former Kimberly Clarke manufacturing site, will include four warehouses totaling 1.5 million square feet when completed this fall. Its developer, an Irvine unit of Australia-based Goodman Group, paid $202 million for the site in 2019.

The Fullerton lease of the campus’ third-largest building is the biggest in Sprouts’ portfolio, according to regulatory filings. In January, the largest of its seven distribution centers was 135,000 square feet.

The lease was disclosed in a brokerage report by Cushman & Wakefield, though Sprouts alluded to the deal in a May earnings call. The nearest Sprouts distribution warehouse is in Colton, in the Inland Empire.

Sprouts plans “to move our Southern California distribution center into a larger facility in 2023 to support our ongoing growth in that region,” CEO Jack Sinclair told investors. “We’ve already begun to work on this facility, which will include ripening rooms to present fresher product to our customers.”

By square footage, the lease tops one made last month by Rivian Automotive for a 219,000 square-foot plant in Tustin, near its Irvine headquarters.

Sprouts has 129 grocery stores in California, including 18 in Orange County. Typical stores are 29,000 square feet, with a new smaller format of 23,000 square feet. Both are smaller than traditional supermarkets.

Grocery stores continue to outperform the retail market since the pandemic, with consumers cooking more meals at home, according to the Business Journal.

Sprouts, Bristol Farms, Amazon Fresh and H Mart were among the most active big-box grocers looking for space in Orange County last year, according to CBRE.

– Dana Bartholomew

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