TGS Management Plans Office-Warehouse Conversion in Irvine

TGS Management wants to convert a former university campus in Irvine into warehouses.

The locally-based quantitative hedge fund led by billionaire C. Frederick Taylor has filed plans to redevelop the former satellite campus for Cal State Fullerton into two warehouses at 1 and 3 Banting, the Orange County Business Journal reported.

TGS bought the 12-acre campus near the 133, 5 and 405 freeways in 2021 for $49.6 million, or $360 per square foot. The seller was Cal State Fullerton, which shut its South OC campus after a short-term leaseback.

The property contains a pair of two-story buildings, built in 1970 and 2005, with a combined 138,000 square feet of offices.

TGS wants to turn them both into industrial distribution warehouses. If approved, it would be the largest office-to-warehouse conversion in the Spectrum area of Irvine, according to the Business Journal.

Vacancy in OC industrial properties was 2.8 percent in the fourth quarter, the lowest in Southern California, according to JLL. Office vacancies across the county were nearly 18 percent.

Developers are now planning or building 2 million square feet of industrial projects in Irvine, including office-to-warehouse conversions near John Wayne Airport, according to the Business Journal.

Iowa-based Principal Financial Services is conducting office-to-industrial conversions in Inwood Park, a two-building 160,000-square-foot office complex at 17300 Red Hill Avenue, which broke ground in January.

TGS has gobbled up land and property in Irvine.

In February last year, the hedge fund bought 42.1 acres on Barranca Parkway in the Great Park Neighborhoods for $240 million, or $5.7 million per acre. The seller was Irvine-based master developer Five Point Holdings.

The low-profile hedge fund aims to build a data processing center larger than 500,000 square feet for its finance operations, unidentified real estate sources told the Business Journal.

TGS was founded three decades ago as one of the first quantitative investing firms, which employs computer algorithms to make its investments.

The company now owns more than 60 acres in Irvine, including its headquarters, and leases a 115,000-square-foot building at the Irvine Company’s Spectrum Terrace office campus.

In 2020, TGS bought a 4.6-acre office property at 23 Pasteur off the 405 Freeway for $28 million, where it’s now building a 48,300-square-foot data center for quantitative trading.

— Dana Bartholomew