LoanDepot Inc. (NYSE: LDI) is entering the new year with a much smaller Orange County presence, with the country’s fifth-largest retail mortgage lender and the second-largest nonbank retail originator slimming down its workforce and office footprint as part of cost-saving efforts amidst larger industry challenges.
Sources tell the Business Journal the company has given up multiple buildings in Foothill Ranch and Lake Forest, including its former three-building headquarters campus, as well as much of its space at Irvine’s 2600 Michelson Drive office tower, consolidating into three buildings elsewhere in Irvine.
The reorganization includes a relocation of loanDepot’s headquarters from Foothill Ranch to the Irvine Spectrum.
The company is now based at the Discovery Business Center office campus, at 6561 Irvine Center Drive.
The givebacks total north of 150,000 square feet, and follow the company’s announced plans last year to lay off a large portion of its staff.
In the past year, the company has gone from 11,300 employees to about 6,000, including 2,000 employees in Irvine.
Retraction, Relocation
In 2015, loanDepot occupied nearly 250,000 square feet in Orange County, and continued to add space as business boomed over the subsequent years, though much of its staff went remote at the onset of the pandemic. Brokerage data indicates its local presence was approaching 400,000 square feet of office space at its peak.
Today, it occupies closer to 60,000 square feet in the area.
The firm has been putting large blocks of space on the market for sublease in recent months, including at the Michelson tower in Irvine’s airport area, where it once occupied nearly 60,000 square feet. It has subleased all but 20,000 square feet of that space and is actively marketing the remainder.
It’s not the only real estate company shrinking its footprint at the 17-story tower; residential data and brokerage company Zillow, which signed a 40,000-square-foot lease at the building in 2018, has put some of its space on the market, sources indicate.
LoanDepot’s operations are now based out of a 64,006-square-foot building at Discovery Park, an Irvine Co. office campus. Its headquarters was moved to Irvine as of Dec. 1.
LoanDepot signed a lease for the entirety of the building in 2018, records indicate. The lease expires at the start of 2025.
Defrosting
Company officials indicate the firm has sufficient cash reserves to survive the headwinds facing the industry due to rising interest rates; mortgage originations fell nearly 20% to $633 billion in the third quarter from the quarter prior, signaling a return to pre-pandemic volumes, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data.
“The Ice Age is here for mortgages,” founder Anthony Hsieh told the Business Journal last May.
Hsieh, who founded loanDepot in 2010, took the company public in 2021. Shares, priced at $14, at one point nearly reached $40 each and its market cap soared above $4 billion.
As of last week, shares were hovering below $2 for a market cap of $611 million.
LoanDepot’s contraction is largely a result of the Federal Reserve’s move in 2022 to increase its benchmark interest rate to stem inflation.
When the company announced layoffs last summer, it said it expected to generate $375 million to $400 million of annualized savings from those expense-saving moves. There may be additional bright spots on the horizon, with several market watchers anticipating at least one rate cut this year.
Hsieh last April announced the hiring of former CoreLogic CEO Frank Martell as the company’s new CEO and president, while he moved to the executive chairman role.
“We aggressively reduced our costs, exited the wholesale channel, and narrowed our losses during the third quarter in line with our previously announced targets,” Martell said in a November statement following its third-quarter earnings report, when the company reported revenue of $274.2 million, which while down 70% from a year ago, still topped analyst expectations for $243 million.
