Fueled by pandemic, Fender expands instrument making in Corona

Fueled by increased product demand, Fender Musical Instruments Corp. is expanding its operations in Corona with a new facility that will add another 100,000 square feet of space.

The storied company is retrofitting an existing building at 345 Cessna Circle, which it is leasing. Fender plans to hire hundreds of additional workers for the new operation. It will complement the company’s adjacent 200,000-square-foot facility at 311 Cessna Circle, which has nearly 1,000 employees.

Openings are available for a variety of jobs, ranging from engineers and supervisors to hourly employees, including mill/machinists and others who handle sanding, painting, buffing and final assembly.

Pandemic-fueled growth

Openings are available for a variety of jobs, ranging from engineers and supervisors to hourly employees, such as mill/machinists and others who handle sanding, painting, buffing and final assembly. (Photo courtesy of Fender)

Ed Magee, Fender’s executive vice president of operations, said the additional space is sorely needed.

“The pandemic catalyzed incredible interest in learning guitar all around the world,” Magee said via email. “With that spike in interest comes growing demand for instruments to play.”

When COVID-19 lockdowns began, the company offered a free, three-month subscription to Fender Play, a learning app for guitar, bass and ukulele. Since then, an estimated 1 million users have accessed the app, Magee said.

The new facility is expected to be up and running by October. It will support Fender’s Custom Shop and “Made in the USA” production lines across the Fender, Gretsch, Jackson, Charvel and EVH brands.

A community college partnership

Fender’s Corona-based factory also has forged a Master Builder Apprentices partnership with Norco Community College that allows the company to recruit, train and hire new employees.

Marco Garcia, a Centennial High School graduate, joined Fender’s executive team as director of operations. Fender’s expansion is part of the company’s mission to create a “Fender Campus” in Corona, grow its manufacturing footprint and continue investing in the community.

“We have established strong connections to this community, and it certainly influences who we are and how we operate,” Magee said. “We are committed to Corona, our growth, and are very excited about the future.”

Fender plans to hire hundreds of additional workers for the new operation. (Photo courtesy of Fender)

Jessica Gonzales, the city’s economic development director, said Corona is eager to provide the resources needed for local businesses to thrive.

“Fender’s expansion and growth illustrate that Corona truly is at the core of economic prosperity,” she said. “Fender’s balance of craftsmanship, commitment to workforce development and innovation highlight the quality of manufacturers that Corona attracts.”

Used by top players

The name Fender is synonymous with some of the best musicians in rock, country and blues. Over the years, top players like Jimi Hendrix, Eric Clapton, Jeff Beck, Keith Urban and Brad Paisley have wielded Fender Stratocasters and Telecasters as their primary axes, and the company’s amplifiers, effects pedals and accessories are seen on stages throughout the world.

Fender also maintains a custom shop, known as the “Dream Factory.” It has grown to become a preeminent maker of highly collectible, custom instruments used by both working professionals and guitar enthusiasts.

As a founding member of the Fender Custom Shop, Redlands resident Alan Hamel designed the sonically expanded Twisted Tele neck pickup and also worked on the Western Boots Telecaster models and Vintage Hot Rod Stratocaster guitars.

Are asking prices obsolete in this crazy real estate market?

Asking prices. Pay me this and we’ll make a deal. Easy? Not so fast.

In our hyper-inflated industrial real estate market, every COMP is a new high watermark. Demand for manufacturing and logistics buildings outstrips supply. Read: There is approximately three to four times the number of buyers than there are sellers. Is this scientific? No. Strictly anecdotal from my experience this year and the last six months of 2020.

Therefore, sellers are counseled to proceed cautiously lest they leave shekels on the sideboard. One way to accomplish this is to enter the market un-priced. The traditional back and forth of a negotiation – offer, counter, counter, strike – is history. What’s replaced it is akin to the old adage of “bring me a rock.” Yes, that’s indeed a rock. Now, bring me another rock. Once referred to as “countering oneself” – a no-no – is now quite common.

Here is the typical cadence these days while representing a buyer. We scan available inventory that meets the buyer’s parameters. If there is one match, you’re lucky. Two or three? Jackpot! You then check with the seller’s broker to confirm availability and touring protocol. Ooops. Sorry, we’re under contract. No, that sold last week. Nope, the tenant renewed.

Our system is quite archaic compared with our brethren in residential sales. Yes, we must call – quite inefficient – brokers to verify info. Realty boards streamline this with their levels of availability – active, active pending, active, contingent, etc. But there’s no such luck in our world. Commercial real estate is not under the same purview.

But, I digress. Back to the search. Faced with limited or no avails – now what? Well, we then scan the list of buildings available for lease. There might just be a seller hiding among the lease listings. You must filter out the “portions” of larger buildings as a buyer would have to buy something much bigger and factor out the owners who are atypically sellers. Hop on that phone and dial your fellow agents. Ok, cool. You found a possibility.

A proposal must check ALL the boxes – price north of where the last sale traded, superior financial qualifications, very few – if any – contingencies, quick close, large deposits, a bit of pixie dust, a hope and a prayer. Frequently, the off-market Hail Marys are dropped in the end zone. No score as the time expires.

But, you still have the buyer. Now what? Hand to hand combat. You pull a list of everything – vacant or occupied. Put together a nice letter outlining your need and be very specific. Send them to the owners. You might just hit pay dirt.

So, are asking prices obsolete? It would certainly appear so!

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.

 

Orange County adds 8 million-dollar ZIPs, loses 8 housing bargains

Orange County added eight million-dollar Orange County neighborhoods in the year ending in March as the pandemic era’s rapid home-price appreciation left eight fewer “affordable” ZIP codes with sales prices under $600,000.

My trusty spreadsheet, filled with Orange County homebuying stats from DQNews/CoreLogic, found 22 of the county’s 83 ZIP codes with median selling prices above $1 million vs. 14 a year earlier. Total closed sales of all residences — existing and new homes; single-family houses and condos; at all prices — were 3,895. That’s up 39% in from the locked-down scarred March 2020.

Those seven-figure communities had 979 sales equaling 25% of all Orange County homes sold. In March 2020, 661 residences were sold in ZIPS with $1 million-plus medians, or 24% of transactions.

Why? A buying binge created by cheap loans and few homes for sale. So, the countywide median for the month of $835,000 was up 10.6% in a year.

Bubble Watch tracks housing risks. Read it here!

At the other end of the pricing spectrum, Orange County’s “bargain” communities — medians of $600,000 and below — numbered seven vs. 15 a year earlier That’s 53% fewer sub-$600,000 ZIPs in a year.

Sales in these “affordable” ZIPs were 254 — making “bargains” 6.5% of all purchases. In March 2020, 130 purchases were in “bargain” ZIPs — or 4.6% of all sales.

The month before, there were 22 million-dollar ZIPs and 6 “affordable” communities.

Here’s the million-dollar ZIPs, highlighting communities new to the club, for March …

Newport Beach 92662: $3.73 million — up 15% in a year.

Corona del Mar 92625: $3.24 million — up 18% in a year.

Laguna Beach 92651: $2.57 million — up 38% in a year.

Newport Beach 92661: $2.48 million — off 3% in a year.

Newport Coast 92657: $2.17 million — off 33% in a year.

Villa Park 92861: $2.16 million — up 78% in a year.

Irvine 92603: $2.08 million — up 25% in a year.

Newport Beach 92663: $2.05 million — up 3% in a year.

Newport Beach 92660: $2.03 million — up 23% in a year.

Dana Point 92624: $1.38 million — up 15% in a year.

Irvine 92602: $1.35 million — up 12% in a year.

San Clemente 92673: $1.25 million (new) — up 40% in a year.

Santa Ana 92705: $1.20 million — up 19% in a year.

Dana Point 92629: $1.16 million (new) — up 24% in a year.

Trabuco/Coto 92679: $1.16 million (new) — up 36% in a year.

Los Alamitos 90720: $1.15 million (new) — up 16% in a year.

San Juan Capistrano 92675: $1.13 million (new) — up 20% in a year.

Huntington Beach 92649: $1.07 million (new) — up 20% in a year.

Huntington Beach 92648: $1.05 million (new) — up 10% in a year.

Yorba Linda 92887: $1.05 million (new) — up 30% in a year.

San Clemente 92672: $1.05 million — off 0.2% in a year.

Seal Beach 90740: $1.01 million (new) — up 1% in a year.

Here’s Orange County’s lowest-priced ZIPs in March …

Stanton 90680: $596,500 — up 30% in a year.

Santa Ana 92703: $565,000 — up 9% in a year.

Santa Ana 92704: $542,500 — up 22% in a year.

Santa Ana 92707: $477,500 — off 8% in a year.

Laguna Woods 92637: $390,000 — up 11% in a year.

Santa Ana 92701: $314,000 — off 38% in a year.

Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Inland Empire starts 2021 with nation’s highest rent increases

The Inland Empire’s hot apartment market got even hotter in 2021, with the biggest rent hikes in the nation, numbers from four leading apartment trackers show.

At the same time, a year-long dive in Los Angeles and Orange county lease rates may be ending as rents turn the corner and vacancies level off.

The Inland Empire “is a performance superstar, not just for the region but also for the nation,” said Greg Willett, chief economist for Dallas-based apartment tracker RealPage.

“The Inland Empire, Sacramento and Phoenix have been leading all markets for rent growth for the past few years, and the pandemic has only accelerated that trend,” added Yardi Matrix’s April multifamily housing report.

L.A. County, meanwhile, “appears to have moved past bottom for the moment, with occupancy stabilizing and rents up on a month-to-month basis,” Willett said.

And Orange County’s apartment market “hits the middle ground between what’s happening in the Inland Empire and in Los Angeles,” he said. The Orange County market “now is back in relatively good shape and should sustain some momentum moving forward.”

The numbers are based on first-quarter surveys by four apartment research firms: RealPage, CoStar, Moody’s Analytics Reis and Yardi Matrix.

All four indexes showed falling rents since the spring of 2020 in L.A. and Orange counties. Behind those numbers was an apparent eastward migration of home-bound tenants in search of more space and lower rent.

That migration boosted demand for Riverside and San Bernardino county rentals, leading to quick turnarounds and waiting lists for vacant units.

“I cannot remember a time when we had this much demand and its impact on rents and vacancies,” said Randall Lewis, executive vice president of Lewis Management Co., which manages about 11,000 apartments, mainly in the Inland Empire.

Jam-packed

The average apartment rent in the Inland Empire was $1,662 a month during 2021’s first quarter, up $130 a month, or 8.5%, from the year before.

Last quarter’s 8.5% growth rate was the biggest in the Southern California News Group’s composite index since at least 2010 — and the biggest in CoStar’s data since at least 2000.

Yardi and RealPage both listed the Inland Empire as having the nation’s biggest percentage gains in rent this year. Moody’s Analytics Reis listed it as having the second-highest year-over-year rent gain.

A year ago, the Inland Empire had the 26th-highest rent among 82 U.S. metro areas tracked by Moody’s Analytics Reis. This year, it moved up to 21st-highest among those 82 metros.

Yardi figures show Inland Empire rents increased 31% over a five-year period, almost triple the national rate.

“The rental market in the Inland Empire is extremely strong,” Lewis said. “This is fueled by the ability of many people to work from home, as well as the cost advantage of the Inland Empire vs. closer-in markets. Other factors that play into this are a growing job base in the Inland Empire, which produces more demand, as well as demographic forces, which are favorable for the rental … markets.”

State employment figures show employment levels continued rising in Riverside and San Bernardino counties through most of the pandemic.

Vacancy changes are even more striking.

One year ago, all three areas had pretty much the same vacancy rate: 4.1% in the Inland Empire, 4.3% in Orange County and 4.4% in L.A.  County.

Since then, L.A. County’s vacancy rate rose to 5.2%, and the Inland Empire’s vacancies fell to 2.4% — the lowest rate in at least 11 years. Orange County’s vacancy rate fell incrementally through the pandemic, dropping to 3.6% last quarter.

“The (Inland Empire’s) existing apartment stock is jam-packed full,” Willett said.

Few new rentals

Inland Empire rents, meanwhile, are likely to continue outpacing the rest of the region since apartment construction hasn’t kept up with demand.

Almost 39,000 new apartments are under construction in the four-county region, according to RealPage. But just 6% — or about 2,400 units — are in the Inland Empire, even though the area accounts for about 18% of all rental units, U.S. Census figures show.

Orange County, by comparison, which accounts for 16% of the region’s rentals, has about 7,400 new apartments under construction. L.A. County, with 66% of all local rentals, has about 29,000 new units under construction.

The pace of inland apartment construction will pick up in the next two years, Lewis said. But until it does, rents will keep rising, said Willett.

“With only about 2,400 units under construction, occupancy (in the Inland Empire) is going to remain very tight in the near term,” Willett said.

Signs of recovery

Meanwhile, signs of recovery are starting to turn up in Los Angeles and Orange counties as well.

The average rent for an L.A. County apartment was $2,085 a month during 2021’s first quarter. That’s down $77 a month, or 3.6%, from the year before and marked the fourth straight year-over-year decline in L.A. County rents.

But it’s up $4 a month from the final quarter of 2020, rising on a quarter-to-quarter basis for the first time since 2019.

“We are seeing rates tick up a bit,” said Paul Julian, a principal with Advanced Real Estate Services, an Irvine-based apartment owner with about 10,000 units stretching from Newport Beach north to Azuza and east to Redlands.

Fred Sutton, the California Apartment Association’s L.A. spokesman, said he’s not aware of any urban L.A. property owners raising their rents. But vacancies stopped rising, he said.

“People are no longer turning in their keys and saying, we’re leaving,” said Sutton. “That was a real phenomenon” during the pandemic.

Orange County’s average rent increased for a third straight quarter in the January-through-March period, rising to a record $2,108 a month. That’s up $14 a month, or 0.7%.

It’s the first time in nearly five years that an average Orange County apartment was more expensive than in L.A. County.

Two L.A.’s

Suburban L.A. County was less impacted by the pandemic while city centers were hit hardest, observers said.

Free-rent offers and other concessions are up in L.A. County’s urban core, Julian said.

“You’re looking at just about two months of free rent,” Julian said. “Whereas in the suburban market, we see less of that.”

The pandemic likely accelerated the search among the millennial generation for “hipsturbias,” or suburban enclaves offering shopping, dining and entertainment, he said. Suburban L.A. County, as well as the parts of Orange County and the Inland Empire, have benefitted from that trend, he said.

“Many (millennials) are having children. They want more space, and they need more space. They’re looking at schools,” Julian said.

12 indicted in alleged Southern California ‘green’ loan and mortgage fraud scheme

LOS ANGELES — — A loads individuals have been fingered about a supposed home mortgage fraudulence as well as “environment-friendly” car loan system that ran throughout Southern The golden state and resulted in losses of about $15 million, the California Chief law officer’s Office introduced Wednesday.

The 133-count grand jury charge, handed up April 26, declares that the criminal activities happened in Los Angeles, Waterfront as well as Ventura counties.

The indictment charges the defendants with a selection of matters, including conspiracy, home loan scams, grand burglary, identification burglary, bogus, submitting a false or built document and cash laundering.

The offenders presumably exploited the Yrgene Power Fund as well as Renew Financing, business that supply moneying to certified specialists for power- efficient home enhancements for home owners, and utilized incorrect identities to obtain home loan from conventional banks and hard money lending institutions, according to the Attorney General’s Office.

“The claims versus these accuseds charge a pattern of negligence for the law and also determination to reach stealing the identifications of the deceased just to enhance their scheme,” The golden state Attorney General Of The United States Rob Bonta said in a statement revealing the costs. “Our office will certainly seek to hold these accuseds responsible for their alleged activities.”

Those called in the indictment are: Tamara Dadyan, 39, Richard Ayvazyan, 42, Artur Ayvazyan, 41, Grigor Tatoian, 50, Andranik Petrosyan, 46, Arshak Bartoumian, 48, Artashes Martirosyan, 43, Lilit Malyan, 39, Lubia Carrillo, 41, Rosa Zarate, 49, Estephanie Reynoso, 31, as well as Vanessa Bell, 60.

Eleven of the accuseds have actually pleaded not guilty, with Malyan due back in a downtown Los Angeles courtroom for arraignment Might 18.

The instance originated from a multi-year investigation by the Los Angeles Police Department, with assistance from the Federal Real Estate Money Firm, Office of Assessor General.

The attorney general of the United States lauded both agencies for “their work to put an end to a comprehensive, six-year scams plan that caused the theft of an approximated $15 million.”

“If you were a victim or know please call 213-486-6979,” said a tweet from LAPD Capt. Lillian Carranza.