Bridge Properties Real Report Q1 2011 T
- 1. ISSUE Q1 Q2 2011 2008 2010 JAMBOREE CENTER this issue Building Spotlight 1 Executive Summary 1 BUILDING SPOTLIGHT Market Asesment 2 PROJECT SPOTLIGHT: OPUS CENTER IRVINE Broker Information 4 IRVINE COMPANY 2050 MAIN STREET, IRVINE At the center of the Irvine Busi- Jamboree Center: ness Complex, 2050 Main Street 1-5 Park Plaza, represents the third and final fi- Irvine, CA nal phase of the highly successful Opus Center Irvine development A GUIDE FOR DECISION MAKING ORANGE COUNTY OFFICE MARKET within the square feet of Class-A 1.6 million 48-acre Irvine Con- BY: SCOTT JOHNSTONE course. office space in the heart premier of the John Wayne Airport Area. quarter of the year. All submarkets decreased in avail- Opus Center Irvine III offers EXECUTIVE SUMMARY - Turning a Corner 314,074 square feet of space in ability with the exception of North County. In the end, 13 stories at the intersection of Measurable progress was made in the na- MacArthur Boulevard and Main the total availability rate fell to 24.4 percent, down tional economy and the local office market over the Street, acclaimed to be one of the 90 basis points from the previous quarter. Heavier most attractive urban areas in the past six months. In December, the national unem- county. activity in the Airport and South County submarkets ployment rate fell to 9.4 percent as nonfarm pay- reflected tenants’ desire to take advantage of favor- rolls increased by 103,000 from the previous month. able lease terms for highly desirable locations before Additionally, October and November’s numbers trophy spaces dwindle and/or rental rates increase. were revised upward and claims for jobless benefits Even though average monthly asking rents dropped Three 20-story towers designed dropped to the lowest level in two years. The current by world-renowned architect to $1.99 on a full service gross basis, down $0.03 from Opus Center Irvine provides im- administration also signed into law an $858 billion Skidmore, owings & Merrill and mediate access to all of Orange two 12-story towers designed by three months ago, effective rents are inching up be- County’s freeway system. bill extending Bush-era tax cuts for all income levels Langdon Wilson. cause landlords are gaining confidence that the mar- LEASE RATES: $3.65 FSG for two years; the measure also reduces payroll taxes Prime Location off the 405 Free- ket has bottomed and are reining-in concessions. way and minutes to John Wayne for workers by two percentage points for 2011, which Airport with easy access to the 55 The largest investment transactions in the Freeway and the 73, 261, and 241 should help bolster slow but steady job growth. At Toll Roads. fourth quarter were the sales of two previously held the local level, though Orange County’s unemploy- Four-Diamond Hyatt Regency Ir- Maguire Property buildings. In its first entry into the vine on-site. ment rate increased slightly from 9.1 in October to South Coast Metro area, The Irvine Company pur- 9.3 percent in November, it still added 19,000 total Energy Star labeled property - chased the 827,000-square-foot Pacific Arts Plaza for rated in the top 20% of energy ef- nonfarm jobs since November 2009. ficient buildings in the nation. $213 million, or $258 per square foot; Maguire origi- Orange County’s office market turned a Expansive, uninterrupted views. nally acquired the buildings in 2005 for $325 million. corner as the vacancy rate for all property classes de- Rental Rates: The other sale was for 415,000 square feet at Quintana clined to 20 percent, down 70 basis points from three $2.05 - $2.45 FSG to Menlo Equities. Itwas bought out of receivership af- months prior. Fourth quarter’s vacancy rate was 100 ter Maguire Properties basis points less than the market’s historical high of defaulted on the loan, selling for $69.3 million, or 21 percent, which was recorded during the second $167 per square foot. JOHNSTONE | PUCCINELLI | LANTGEN
- 2. p2 Vacant Space by Submarket Vacant Space by Submarket Orange County Office Space, Fourth Quarter 2010 10,000,000 9,000,000 9 000 000 8,489,728 8 489 728 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 , , 3,498,246 3 498 246 2,966,673 3,000,000 2,000,000 1,577,894 754,672 754 672 1,000,000 0 Airport Area Central County North County South County West County JOHNSTONE | PUCCINELLI | LANTGEN
- 3. p3 Vacancy Rates by Submarket Orange County Office Space, Fourth Quarter 2010 Vacancy Rates by Submarket 25.0% 21.6% 21.0% 19.2% 20.0% 20.0% 15.0% 11.4% 10.0% 5.0% 0.0% Airport Area Central County North County South County West County Net Absorption Square Footage by Submarket Orange County Office Space, Fourth Quarter 2010 Net Absorbtion Square Footage by Submarket 400,000 336,560 300,000 200,000 165,024 100,000 22,068 Central County North County 0 Airport Area Airport Area Ce ntra l County North County SouthCounty South County We st County West County 100 000 -100,000 (103,612) (151,366) -200,000 Yearly Job Change, Orange County Orange County Office Space Yearly Job Change, Orange County Total 1998 65,308 Sea sona l l y Adj usted 1999 46,042 2000 43,608 80,000 2001 24,925 60,000 2002 (10,042) 40,000 20,000 20 000 2003 25,342 25 342 Thousands 0 2004 27,758 -20,000 2005 34,250 -40,000 2006 27,983 -60,000 60 000 T 2007 (5,658) -80,000 -100,000 2008 (33,825) -120,000 2009 (109,842) 98 99 00 01 02 03 04 05 06 07 08 09 2010 2011 2012 2010 (9,396) (9 396) 199 199 200 200 200 200 200 200 200 200 200 200 2011 11,904 Source: U.S. Bureau of Labor Statistics 2012 37,177 JOHNSTONE | PUCCINELLI | LANTGEN
- 4. p4 JOHNSTONE | PUCCINELLI | LANTGEN Notable Market TEAM EXPERIENCE Transactions: With over 50 years in the business, we pride ourselves as market makers, providing our clients the most udpated and in-depth perspective on todays marketplace. Our Pacific Arts Plaza experience and historical knowledge allows our clients to make smarter decisions, Costa Mesa resulting in more profit and cost saving opportunities. Buyer: The Irvine Company Size: 877,000 Square Feet The combination of a sole proprietors mentality and attention to detail mixed with institutional experience and backing truly makes us a single source solution for all of 21 Technology Dr. your Corporate Real Estate needs. TEAM CAPABILITIES Irvine • Lease Renegotiation • Employee Location Optimization Tenant: Bio-Rad Laboratories • Multimarket Corporate Representation • Construction Management • Property Analysis + Space Optimization • Lease Administration Size: 65,034 Square Feet • Market Data & Analysis • Architectural Review • Relocation Analysis • Property Analysis 5230 California Ave • Lease Negotiations • Site Acquisition Irvine PBS SoCal: “By combining the company’s headquarters and TV studio under one location, PBS Tenant: Broadcom SoCal has finally found a home in Orange County. We found your team’s attention to detail, Size: 53,839 Square Feet market knowledge, negotiation tactics and professionalism paramount in getting us the best deal possible for the foundation. We appreciate your ability to align our short and long term 15460 Laguna Canyon Road goals for the foundation with our new office lease and location. Without your team’s help, this would not have been possible. On behalf of PBS SoCal Foundation, we would recommend you Irvine to anybody who would need representation or information on the Real Estate Market ” Tenant: Aleks Corporation -Mr. Mel Rogers, CEO/ President Size: 53,220 Square Feet SCOTT JOHNSTONE GREG PUCCINELLI President Senior Vice President Bridge Commercial Properties Grubb & Ellis Company CA License # 00950979 CA License # 01215693 P 949.978.5659 P 949.608.2059 C 949.300.1057 C 949.295.3323 scott@bridgecre.com greg.puccinelli@grubb-ellis.com JASON LANTGEN TARA PIERCY HANA PARADEISER Associate Marketing Coordinator Marketing Coordinator Grubb & Ellis Company Grubb & Ellis Company Bridge Commercial Properties CA License # 01819454 CA License # 01268354 P 949.608.2033 P 949.608.2057 P 818.620.4376 C 949.231.7351 C 949.285.4265 F 949.798.5501 jason.lantgen@grubb-ellis.com tara.piercy@grubb-ellis.com hana@bridgecre.com The information contained herein was obtained from third parties, and has not been independently verified by the real estate brokers. Buyers/tenants should have the experts of their choice inspect the property and verify all information. Real estate brokers are not qualified to act as or select experts with respect to legal, tax, environmental, building construction, soils-drainage or other such matters. The Johnstone, Puccinelli, Lantgen Team is a Co-Brokerage team located at both Bridge Commercial Properties and Grubb & Ellis. JOHNSTONE | PUCCINELLI | LANTGEN