Existing tenants of the 450,000-square-foot VKCC creative office campus in Irvine are in the process of looking for a new home as the property’s landlord—Irvine-based IRA Capital—moves forward with plans to redevelop the complex into an industrial hub.
Sources note IRA Capital is in lease discussions with tenants of VKCC, a nine-building office park near the intersection of Von Karman Avenue and Alton Parkway, a few miles from John Wayne Airport.
IRA acquired the 24-acre site for $102.4 million in January; the low-rise offices counted an occupancy rate of 60% at the time of sale.
IRA Capital’s redevelopment plans are still in flux, but several sources tell the Business Journal that industrial is the most likely option, with the site able to accommodate a roughly 500,000-square-foot facility across several buildings. A phased build-out is likely, sources note.
Other sources indicate IRA Capital is still considering other uses for the site, with residential the most likely alternative to industrial.
“The value of this property is in the land,” IRA co-founder and Principal Amer Kasm previously told the Business Journal. “It’s rare to come across a contiguous parcel of this size in Irvine. We saw the opportunity to reposition it in the long term into its highest and best use.”
Industrial Plans
An industrial project in the 500,000-square-foot range would be among the largest on the books for Orange County, if IRA moves forward on such plans.
It would also be the second sizeable industrial project recently unveiled in Irvine, along with a pair of projects at the Great Park Neighborhoods now in the planning process that would total nearly 700,000 square feet between five buildings.
VKCC is in a commercial corridor near a mix of office, retail and industrial uses. It’s about a mile east of Irvine Crossings, Amazon’s primary Irvine distribution facility totaling nearly 400,000 square feet on Von Karman Avenue.
Another industrial project next to Irvine Crossings, a roughly 138,000-square-foot project at 17451 Von Karman, is nearing completion.
Just one industrial project broke ground in the county during the third quarter: an 82,000-square-foot industrial building in the South Coast Metro.
There’s about 1.7 million square feet of industrial product underway in Orange County, according to CBRE Group Inc., down from 2.2 million square feet in the second quarter after Sares Regis Group delivered three buildings at the Huntington Gateway industrial park totaling close to 350,000 square feet.
Irvine’s airport area had nearly 400,000 square feet of industrial under construction during the third quarter, according to the CBRE report. The area’s industrial footprint totals some 18.6 million square feet.
Tenant Shuffle
Relocations at VKCC have already begun to take place.
Consumer Direct, a personal finance software firm that’s one of the main tenants of VKCC, recently inked a deal for the entirety of a new creative office space at the Park Place office park elsewhere in the city, totaling north of 40,000 square feet.
The office is on the retail portion of the mixed-use Park Place complex. The space was previously a Sport Chalet; landlord LBA Realty redeveloped the site into a roughly 40,000-square-foot creative office space.
Construction began in late 2020 on the office—which fronts Jamboree Road near the intersection of Michelson Drive—and delivered last year.
The lease was brokered by Cushman & Wakefield’s Bob Thagard and Ali Anderson along with several individuals from CBRE, including Jennifer Whittington and David Dowd.
The two firms handled leasing efforts for the 2.2 million-square-foot Park Place development.
Creative Conversion
IRA Capital acquired VKCC from EQ Office, which purchased the office as part of a 2015 portfolio deal. In 2017, it began a creative office conversion for the low-rise campus, which includes wellness and fitness components, concierge services and various food and beverage options among other amenities.
A drop in demand for the office sector from investors and tenants alike in the wake of the pandemic has prompted a surge in conversion and redevelopment projects across the region.
IRA is no different, with new plans for once-popular creative office projects across its portfolio.
IRA counts a portfolio of about 8 million square feet; nearly 70% of that is comprised of healthcare and medical offices, with the balance made up of traditional office, retail and multifamily.
Its purchase of VKCC came a little more than a year after it bought Anduril Industries’ former headquarters in Irvine for $103 million. The nearly 155,000-square-foot building at 2722 Michelson is about 2 miles from VKCC, and is exploring a potential redevelopment of its own.
IRA is in the early stages of redeveloping the office, at the busy intersection of Jamboree Road and Michelson, into a mixed-use site involving multifamily and other components.
Consumer Direct Expands in Irvine
The new Irvine headquarters for Consumer Direct marks an expansion for the personal finance software firm.
The company inked a deal this month to relocate its office from the VKCC office campus to the Park Place development elsewhere in the city, taking over a new, 42,000-square-foot creative office building that delivered last year within the retail portion of the mixed-use campus.
The company, founded in 2003 by David Coulter, patented several technologies focused on helping consumers track and change their credit score, monitor their savings and spending, and buy fraud insurance in one application.
The company says it counts a “diverse network of 10,000 partners” and has five patents for its tech. It services businesses in addition to consumers, touting its offerings as an employee benefit.
One of its products is the myLONA Smart Lending platform, which aims to increase loan options by helping users up their credit score through “a precise plan” generated from the app.
