Santa Ana-based Stearns Lending Inc. is expanding into two of Central Orange County’s more prominent office buildings, the latest sign of growth for one of the largest privately held mortgage lenders in the U.S.
The company recently inked leases at the MetroCenter at South Coast office complex in Costa Mesa, and the Xerox Centre in Santa Ana.
The new leases combine for 62,517 square feet, according to Jack McNutt, executive managing director for the Newport Beach office of Newmark Grubb Knight Frank. McNutt negotiated both leases on behalf of the company.
Stearns Lending has an estimated 1,400 employees, with about half in OC. The company said it has added more than 500 workers over the past year. It retains its headquarters at 4 Hutton Centre in Santa Ana, which sits along the Costa Mesa (55) Freeway with the company’s name atop the building.
The lender will occupy about 100,000 square feet of office space in Orange County once the new leases take effect in a few months. That’s about the equivalent of four or five floors of a typical high-rise office.
The two new lease deals also come with top signage for each of the new locations—a key reason the company opted to go with new locations rather than expand in its existing office, McNutt said.
“The economics (of the lease) were good, but it wasn’t a purely financial decision,” McNutt said. “A big driver was the signage.”
Terms of the new leases weren’t disclosed.
McNutt said that each deal runs for about three-and-a-half years.
Monthly asking rents at MetroCenter are about $2 per square foot. Xerox Centre’s rents run about $1.95 per square foot, according to CoStar Group Inc. data.
The deal at Xerox Centre means Stearns Lending will get its name atop what is arguably Santa Ana’s best-known office, a 15-story glass building that sits along the Santa Ana (I-5) Freeway.
The company will be leasing 21,441 square feet at Xerox Centre, and will be getting the “dominant” signage at the building, McNutt said.
Xerox Corp. also occupies space at its namesake building and will keep its name on top of one side of the office, he said. There’s no name-change planned for the property.
The larger of the two new leases is at 555 Anton Blvd., one of three offices at the MetroCenter office complex that sits a few blocks from the South Coast Plaza shopping center, next to the San Diego (405) Freeway. Stearns Lending will be taking 41,076 square feet at that building.
Different divisions of Stearns Lending will be at each of the three locations, according to McNutt.
Parent Stearns Corp.’s operations include several services in addition to its core lending division, including Stearns Wholesale, TriVerify and CU Partners.
The company isn’t counting out taking more space at its existing 4 Hutton Centre headquarters going forward if it sees further expansion or other developments, McNutt said.
The 215,290-square-foot building, which was bought for $37 million in 2011 by a China-based investment group, counts its share of empty space. CoStar lists the building as being about half-full.
Stearns Lending’s growth during a record-breaking 2012 year suggests the company could need more office space if trends continue.
New Marks
The company, founded in 1989 by Glenn Stearns, said it set new marks last year by funding nearly 49,000 loans for $11.8 billion. This was a 107% increase in volume from 2011 levels, when the company ranked as the fifth-largest residential lender by wholesale volume.
Monthly loans at Stearns Lending fell to a low of $14 million near the nadir of the last mortgage crash in 2007.
Aggressive cuts in expenses and personnel, along with a decision to shut down the company’s option adjustable rate mortgage division just before that sector’s crash, helped keep the company afloat when many of its competitors failed.
Efficiencies gained through technology, and a more-nimble operation than some of its larger competitors, appear to have helped the company gain market share amid the rebounds of the mortgage and housing industries.
“When the big guys get backed up, they have a tendency to raise their price, to slow down volume,” Chief Executive Brian Hale told Reuters earlier this month. “That gives other lenders an opportunity, because the consumer thinks, ‘Why would I pay an extra $100 a month.’ ”
RREEF, owner of MetroCenter at South Coast, was represented by Brian Harnetiaux of Transwestern in the new lease with Stearns Lending.
1851 East First Street Investors LLC, owner of the Xerox Centre, was represented by Justin Hill, Simon Dillon and Mark Friend of CBRE Group Inc.
