Los Angeles-based The Capital Group Companies Inc. is in talks with The Irvine Company to buy 52.5 acres along Jeffrey Road near the Santa Ana (I-5) Freeway, with plans to develop nearly 1 million square feet of office space.
The Capital Group,a privately held investment firm that runs the American Funds Group mutual-fund operation with $325 billion under management,plans to move the 1,700 employees of its Western regional service center now housed in a leased three-building, 355,000-square-foot complex in Brea to the new facility.
But don’t expect to see the new Irvine business park any time soon. The Capital Group and The Irvine Company both have hoops to jump through before the project can move forward.
The Capital Group has a target date of 2004 to complete the 615,000-square-foot first phase of the project, intended to accommodate the employees from Brea. A second phase totaling 320,000 square feet would follow sometime before 2010 and accommodate projected further expansion of the service center.
The company said it has no plans to move employees to Irvine from either its Los Angeles headquarters or another facility in West LA.
According to Peggy Schneble, manager of planning and development for the city of Irvine, The Irvine Company has a large swath of land at Jeffrey Avenue and Trabuco Road entitled for medical and technical use. The Irvine Company is processing a parcel map to divide the property, Schneble said, adding that she expects the parcel map to go to hearings by the end of the year.
The Irvine Company also needs to annex the now-unincorporated land to Irvine, Schneble added.
Once the parcel map is approved, The Irvine Company can sell the land to the Capital Group.
Brokers with the Orange County office of Cushman & Wakefield and the Los Angeles office of C. B. Richard Ellis are negotiating the Capital Group deal, but they declined to talk about the specifics. However, an industry source said The Irvine Company could get $23 per square foot for the land.
Though The Irvine Company declined to comment on the proceedings, a Capital Group spokesman said taking the slow track is OK with the money manager, which prides itself on its conservative approach to business.
“This is definitely an expansion,” said Chuck Freadhoff, media relations coordinator for The Capital Group Cos. “We’re looking long-term and looking to accommodate growth in the long-term.”
Founded in 1931 in Los Angeles, The Capital Group takes a cautious, non-faddish approach to managing the funds of its 8 million shareholders worldwide. Don’t look for many Internet companies among its investments. Its mutual fund family provides investment services for thousands of corporations, banks, trust companies and retirement plans.
“We have been in business 70 years and only manage 29 funds,” Freadhoff said.
At its Brea operation, one of four national service centers, The Capital Group has American Funds Group employees, Capital Group fund accountants and IT personnel. With the service side quickly expanding beyond the scope of the Brea facilities, the Capital Group has looked for larger space with the potential to accommodate future growth, Freadhoff said.
“One of our most important assets are our employees,” he said. “But they’re getting cramped at the current location and it’s our goal to try and accommodate and keep good people.”
“We don’t ask where you want to be in six months,” Freadhoff added. “We ask where do you want to be in six years.” n
