Newport Center Drive might be the glamour location among Newport Beach offices, but Quail Street is developing a niche of its own in the city’s office market.
The half-mile-long street—home to a few dozen low-rise buildings and several mid-rise offices—is becoming a hub of sorts for developers of creative-office space, with several of its older buildings earmarked for sizable redevelopment projects over the past year.
Creative-office space typically emphasizes open-air work settings with fewer individual rooms and lots of collaborative space.
The latest and largest creative conversion project: 1501 Quail St., a 47,541-square-foot building between Quail and Bristol Street North near John Wayne Airport.
Irvine-based Bixby Land Co. just bought the two-story building for a little more than $9 million. It’s the real estate investor and developer’s second Orange County office acquisition since November, when it bought a 45,576-square-foot office building at 18231 W. McDurmott in Irvine.
The company previously focused much of its recent investment activity in Los Angeles County and Silicon Valley. Its activity in those parts of the state made Bixby one of California’s more active creative-office developers in the past two years. Its investments in those projects are now worth about $350 million.
Bixby said it is investing $16.5 milion in the Quail Street building to make it more contemporary and tenant-friendly.
“We are repositioning this building with extensive exterior upgrades that will markedly change the appearance of the building and appeal to companies seeking a dynamic, contemporary office setting,” said Bixby Chief Executive Bill Halford.
The building is being repositioned from single tenancy to accommodate multiple tenants. It will be vacated prior to the renovation, which is scheduled to be completed later this year.
The building was sold by an affiliate of Boston-based TA Associates Realty in a deal brokered by Jones Lang LaSalle’s Steve Economos and Geoff DeWolf.
Active Street
Bixby’s creative-office plans add another low-rise office property on Quail Street to the list of those that have been eyed for major renovations or have already seen such changes under consideration.
Other buildings on the street eyed for creative-office space include the 20,500-square-foot building that holds the University Athletic Club.
Newport Beach-based Hager Pacific Properties bought the building, at 1701 Quail St., last year and has done a good amount of renovations to the property. It now has workout equipment, an indoor basketball court and other features.
Hager Pacific is marketing the building for sale to prospective owner-users who could take renovations further for a medical or creative office property.
Other buildings on the street that have creative office features include the headquarters of family law firm Minyard Morris LLP, as well as some of the offices at the 18-building Hangars Newport Beach office complex.
The area’s offices appeal to longtime area companies that are looking to retain a Newport Beach address but find themselves being priced out of offices near Newport Center, according to Rusty Turner, chief executive of real estate owner and developer Turner Real Estate Investments.
Newport Beach-based Turner last year paid about $5.7 million for 1300 Quail St., a 30,027-square-foot office a few blocks from the intersection of Jamboree Road and MacArthur Boulevard.
The property is getting an extensive makeover that should be completed this year.
Fox Head Architect
Bixby said its two recent OC acquisitions will raise the bar for creative-office designs in the area.
“The market supply for innovative office space in Orange County has not kept pace with demand, and frankly, much of the office product that has been dubbed ‘creative space’ falls short of what can be achieved in this area,” Bixby’s Halford said.
The company has brought in senior designer Sam Farhang of San Francisco-based Rapt Studio to lead the redesign of the Quail Street project.
Farhang previously led the design team at Clive Wilkinson Architects for the creative redesign of the Fox Head Inc. headquarters building in Irvine. That 81,600-square-foot Armstrong Avenue building sold last year for about $27.3 million and an eye-catching $334 per square foot—the first big sale in OC of a recently redeveloped creative office.
The Quail Street redesign will be one “that uses space in an authentic and meaningful way, focusing on the experience like a high volume atrium entry that introduces the visitor to a second floor outdoor collaborative space,” Farhang said.
Other features of the property will include heavy use of natural light for the interior of the office, as well as an amenity-rich outdoor area that can be used for meetings or relaxing—a common feature of recent Bixby creative-office projects.
The Newport Beach project will be Bixby’s ninth acquisition of a building slated for a creative-office renovation since 2011; those buildings total about 1.2 million square feet.
