Two big names in the financial services sector just became roommates in the newest office building at Newport Center.
The four-story building at 888 San Clemente Drive still has construction workers on site finishing up details, but PaineWebber Inc. already has its operations running in the 40,000 square feet it has on the top two floors.
The investment bank and brokerage, which is being acquired by Swiss bank USB AG for just more than $10 billion, is joined by Chase H & Q;, which was formed last year when Chase Manhattan Corp. paid $1.35 billion for investment bank Hambrecht & Quist. The company just signed the lease for 26,000 square feet at 888 San Clemente, putting the two rivals within earshot of each other.
Does it pose a problem for the heavyweights?
“It doesn’t bother me,” said Don Dalis, a senior vice president for PaineWebber and head of the Newport Beach office. “In the spirit of what we do, it is good for the community.”
Newport Center is home to most of the financial institutions already famous on Wall Street: Pacific Investment Management Co., Pacific Life Insurance Co., Merrill Lynch & Co., Morgan Stanley Dean Witter & Co., Charles Schwab Corp., Quick & Reilly Inc. Investment banker Roth Capital Partners Inc. moved its offices there from Irvine, while Northern Trust Corp. has its regional headquarters within the circle.
And the two newest tenants at 888 San Clemente already have offices in Newport Center, but the Chase Manhattan and Hambrecht and Quist merger and the USB and PaineWebber merger solidify Newport Center’s claim to being “The Wall Street of Orange County,” according to officials from The Irvine Company, Newport Center’s owner.
“Newport Center is the financial hub of Orange County,” said Bill Halford, president of the Irvine Office Company, a division of the Irvine Co.’s Investment Properties Group. “(Those) people are most demanding about the environment they work in. These companies tend to aggregate, because they compete for the same labor pool. They have no assets other than their people.”
That’s one reason why PaineWebber was attracted to the building, Dalis said.
“It is a gorgeous building. There is an unobstructed view of the golf course, the Back Bay and Catalina,” he said.
The two financial services companies now take up two-thirds of the space available. The balance of the building is set for smaller but still high-profile tenants. He said he is also expecting a venture capital firm in New York to move into the building shortly.
“It’s a great place. The pulse is here,” Dalis said.
PaineWebber was previously in two separate buildings, one in Newport Center and another in MacArthur Court in Irvine totaling about 30,000 square feet, Dalis said.
Dalis said he wanted the building because PaineWebber needed more space and also because of the building’s higher profile.
“We designed (the building) with high-caliber tenants in mind,” Halford said. “It sets the tone for the rest of the building.”
At nearly $5 per square foot, rents at Newport Center also are high caliber , the highest in the county, according to real estate brokers. n
