It didn’t take long for Irvine Company to land a big tenant at its recently acquired Pacific Arts Plaza office complex in Costa Mesa.
The Newport Beach-based landlord, which closed its purchase of the eight-building property in the business and arts district around South Coast Plaza in December, recently signed on Morgan Drexen Inc. as its first new tenant at the complex.
Morgan Drexen, now based in Anaheim, provides support programs to lawyers who help consumers with debt resolution.
It pans to relocate to Costa Mesa starting next month. It’s moving into a five-story office building at 675 Anton Blvd.
Morgan Drexen is leasing the entire 65,131-square-foot building and is set to have its name at the top.
About 300 employees are moving to the company’s new headquarters. The relocation is expected to be completed by June.
It’s a sizeable expansion for the company, which had been subleasing space from short-term lender CashCall Inc. in Anaheim’s Arena Corporate Center next to Honda Center.
Morgan Drexen is taking one of the smaller buildings at the 827,000-square-foot complex, which also includes a few restaurants.
Bank of America Corp. was the former primary tenant of Morgan Drexen’s new building. After consolidating operations elsewhere, Bank of America now is down to 20% of the building, according to brokers.
Morgan Drexen’s lease is for five years, according to brokers with the Irvine office of Orion Property Partners, which represented Morgan Drexen in the deal.
Terms of the lease weren’t disclosed. Irvine Co. is advertising monthly lease rates ranging from $2.10 to $2.50 per square foot for other office space in Pacific Arts Plaza, which it bought for a reported $213 million.
Officials for Morgan Drexen said the relocation’s being done in preparation of a national expansion.
President Stephen Nagin said his company’s new headquarters “will be a block” from numerous potential law firm clients.
Rutan & Tucker LLP is the largest tenant at Pacific Arts Plaza. Costa Mesa counts eight of the 20 largest law firms in the county, in addition to dozens of smaller firms that are potential customers for Morgan Drexen.
Morgan Drexen Critics
Morgan Drexen has its share of online critics.
An earlier venture of Morgan Drexen founder and Chief Executive Walter Ledda settled deceptive businesses charges brought by the Federal Trade Commission in 2005.
Morgan Drexen’s expiring sublease and the company’s need for more parking and a combination of office, software and back-office space made finding a building tough, said Orion managing partner Jay Carnahan, who worked on the deal with colleague Troy Leland.
Irvine Co. officials, including office properties President Doug Holte, stepped up around the time of the Pacific Arts Plaza purchase—Irvine Co.’s first office buy in Costa Mesa—and helped put together the lease in a matter of weeks, Carnahan said.
“Normally, a deal like this wouldn’t have been made (so quickly),” Carnahan said.
The deal’s the latest example of Central County tenants using the down real estate market to move to higher-end office space near John Wayne Airport at affordable rates, according to Carnahan.
Pacific Arts Complex
Irvine Co. acquired the Pacific Arts complex out of receivership.
The property’s last owner was Los Angeles-based Maguire Properties Inc., which now goes by MPG Office Trust Inc. It bought the complex in 2005.
Maguire defaulted on loans for the property and several other OC buildings in 2009. It had a $270 million loan—which works out to about $343 of debt per square foot—tied to Pacific Arts Plaza, according to regulatory filings.
Irvine Co. is reported to have bought the complex for about $250 per square foot.
The company made its first move into the area about two years ago when it built an 890-apartment complex along Anton Boulevard and Sakioka Drive called The Enclave.
The Pacific Arts buy gives Irvine Co. about 10% of the office market around South Coast Plaza.
In addition to Holte, Irvine Co.’s Rick Wandrocke and Gary Gerson represented the landlord in the lease.
