The newest office tower being built in Newport Center is available for lease, with rental rates at the trophy property expected to rise as high as the building’s 21 stories.
Irvine Company executives last week confirmed that it will be leasing its 520 Newport Center Drive office as a multitenant building.
“It’s going to be a great opportunity for Orange County companies or regional companies [with operations here] to be in a premium work place,” said Doug Holte, president of Irvine Co.’s office division.
It’s the first time in nearly 30 years that a newly built tower on Newport Center Drive—OC’s most expensive street for office space—has been available for lease at the time of its opening.
The only other tower built during that time period—the 20-story office at 650 Newport Center Drive, where interior work is wrapping up—was preleased to Pacific Investment Management Co. for its new headquarters before construction started.
Newport Beach-based Irvine Co. said it plans to officially begin marketing the space at 520 Newport Center Drive by the end of the month.
Prospective tenants will have the opportunity to lease between one and four floors of space of the building, according to Steve Case, executive vice president for Irvine Co.’s office division.
Financial and professional-services firms, as well as local entrepreneurs, will most likely be the building’s tenants, according to Case.
Its “institutional-quality” design—featuring floor-to-ceiling high-performance glass, coastal and inland views, and environmentally friendly features—could also draw tenants from outside California, Holte said.
Irvine Co. also expects to turn some of the space on the building’s lower floors into its ReadyNow offices, which offer move-in-ready suites to smaller tenants.
The bulk of the building’s core construction work is expected to be wrapped up this fall. Some tenants might begin to move in around the end of the year, depending on the pace of interior tenant improvement work.
Completion of a parking structure at the site is slated for early next year.
Quiet on Plans
The announcement on leasing plans clears up one mystery surrounding Irvine Co.’s 331,000-square-foot building, which began construction in October 2012.
The developer, Orange County’s biggest landlord, had previously said it was considering using all or part of the new building for its own operations.
Irvine Co. has its headquarters next-door at 500 Newport Center Drive. Its corporate office is one of two nine-story buildings on the same block as the new tower.
The 520 Newport Center Drive tower is one of the “signature pieces” of architect William Pereira’s nearly 50-year-old original master plan for Newport Center, Holte said. “This will round out the 500 block.”
Irvine Co. could still move some of its own operations to the new tower, but the developer wants to first gauge potential user interest.
To date, the company’s marketing program for the new development has been to let the building, in effect, do the talking as it rose steadily over the past year or so.
“We wanted to bring the building along enough” for prospective tenants to see its quality first-hand before starting a leasing program, Case said.
Exterior work is largely done now.
Henry Cobb of New York-based Pei Cobb Freed & Partners Architects LLP is the design architect for the project, while LPA Inc. in Irvine is the executive architect. Hathaway Dinwiddie Construction Co. of Los Angeles is the general contractor for the office.
The cost of developing the building is said to top $100 million.
High-Rent District
Still undisclosed are the rents potential tenants could pay for space at Newport Center Drive. It’s safe to say they won’t be cheap.
Newport Center Drive—which surrounds the Fashion Island shopping center—ranks as the country’s 10th most-expensive street for office tenants, according to a report last September by Chicago-based brokerage Jones Lang LaSalle.
Monthly rents along the street run about $4.17 per square foot, twice that of the average high-end office space in all Orange County, according to the report.
The street “has cachet,” Holte said. “It might be the premier Southern California location, in terms of [employers] retaining top talent.”
Offices in the Newport Center office market are about 95% leased, according to Case.
That number includes much of the space Pimco will vacate to move down the road later this year.
Top monthly rents in the area are generally in the range of $5 to $6 per square foot.
“We expect we’d be able to achieve [similar rents],” Case said.
