ConAgra Foods Inc.’s restructuring has resulted in a sizable chunk of vacant space coming up for grabs at the Park Place office complex in Irvine.
Omaha, Neb.-based ConAgra is set to give up about 260,000 square feet of office and processing space this month when it closes its unit at Park Place near John Wayne Airport.
The headquarters for ConAgra’s grocery food unit, which includes its Chef Boyardee and Peter Pan divisions, has been based at Maguire Properties Inc.’s Park Place office complex along the San Diego (405) Freeway at Jamboree Road.
ConAgra is leaving about 164,000 square feet of corporate office space, and another 100,000 square feet of concourse space that had been used for food processing and
testing operations.
Jack McNutt and Chon Kantikovit of Grubb & Ellis Co.’s Newport Beach office have been tapped by ConAgra to sublease the space.
The brokers said they’d prefer to find one or two tenants to take up all the space, which was designed specifically for one company.
The buildings originally were built by Fluor Corp., which later left for Aliso Viejo and has since moved its headquarters to the Dallas area.
The brokers said they were “entertaining any and all prospects for the sublease,” including smaller tenants, McNutt said.
ConAgra still has about four years left on its 10-year lease.
The Grubb & Ellis brokers hope to have tenants in the Park Place space by October, according to McNutt.
The office space is going for $2.15 per square foot per month, with the concourse facilities at $1.25 per square foot, full service gross,meaning the landlord pays for operating expenses.
ConAgra announced a sweeping restructuring plan in February.
The company is selling its packaged meat and cheese operations. Among other changes is the relocation of its grocery foods unit from Irvine to Naperville, Ill.
The changes were made to simplify the company’s operations and cut its manufacturing and selling costs, officials said.
ConAgra’s profit from continuing operations fell 42% to $93 million in the quarter ended Feb. 26, versus a year earlier. Sales were up 4% to $2.9 billion.
About 265 ConAgra workers are affected by the closure, which is set for this month. Some employees were offered jobs in Naperville and Omaha, according to a ConAgra spokesman.
Vacancy at 5.8%
The office vacancy rate for space near John Wayne Airport was 5.8% in the second quarter, according to CB Richard Ellis Group Inc. Industrial vacancy was 3.5%.
Both vacancy levels are at or near historic lows, which normally would bode well in attracting tenants to sublease the Park Place space.
Whether it does for ConAgra’s space isn’t clear, a broker said.
The unique layout at the Park Place site could make it hard to find tenants who want big blocks of space, said Bruce Schuman, senior vice president for the Irvine office of tenant representation firm Studley Inc.
