Before flex tech was all the rage, Bob Searles was busy creating low-rise office campuses in an Orange County market dominated by high-rises.
In 1984, he developed the 160,000 square foot Daimler Office Center in Santa Ana. During 1989 and 1990, just before the real estate market crashed, Searles completed the six-building Alton Deere Plaza, also in Santa Ana.
Both survived the recession, maintaining strong occupancy rates.
Then, when the market recovered, developers rushed to build industrial facilities in the Inland Empire. But they found that before almost everyone else had made the move, Searles DevCorp was already well entrenched in that market as well.
“He’s been a pioneer for years in all sorts of areas,” said Rusty Turner, developer of A.J. West Ranch and a longtime competitor of Searles. “He has a knack for timing the market and developing good-looking, high-end projects that are some of the most successful in Orange County.”
So what is Searles up to these days?
Despite skepticism in some circles that Orange County is facing a new millennium of overbuilding, the Newport Beach-based developer is playing key roles on two projects totaling 337,200 square feet of office space that are expected to cost a total of $67 million to complete.
“The fundamentals continue to be strong for the right type of products in this market,” said Searles. “Well-designed low-rise office buildings in good locations will remain in demand in Orange County.”
Partnering with Chicago-based real estate investors ORIX Real Estate Equities for the first time, Searles is developing twin 66,800-square-foot campus-style headquarters buildings at 1901 and 1921 E. Alton Ave. in Santa Ana.
The new 133,600 square feet of office space being built is adjacent to Alton Deere Plaza, which Searles sold to CarrAmerica after developing.
One of the Plaza’s current tenants, in fact, already has decided to lease space at the new Alton Corporate Center. Collectors Universe Inc., which grades and authenticates coins as well as sports memorabilia, will lease 54,000 square feet at the center. Earlier this month, the company raised $22 million with an initial public offering.
“This new space will give us more room to expand,” said Gary Patten, chief financial officer for Collectors Universe. “We’re ready to move in as soon as it’s built.”
Alton Corporate Center is expected to be finished around May 2000, said the developer, who estimated that it will cost more than $27 million to complete the project.
“We’ve owned product in Orange County before, but this is the first ground-up project for us there,” said Steve Hess, vice president of ORIX who works from the company’s San Diego County offices.
The investment firm currently has a North American properties portfolio valued at around $900 million, he added.
“We’d like to do more projects like this in Orange County in the future,” said Hess.
Asking rates for the property will be around $2.05 a month for a full-service gross lease, according to Don Nourse, senior vice president of CB Richard Ellis in Newport Beach who will be handling marketing of the buildings.
“There’s a lot of competition in that market,” he said. “The vacancy rates are very low and there are other people trying to get buildings up as quickly as possible. But users will have more of a choice now between high-rise or low-rise campus-type projects.”
In Lake Forest, the Foothill Ranch Co. has formed a joint venture with Searles and the Operon Group of Newport Beach to build a $40 million project in another tight market.
As part of Foothill Towne Center Plaza, the partners are building a trio of three-story office buildings totaling 203,600 square feet.
Nourse and Mark Zuvich from Cushman and Wakefield will be marketing the buildings.
“We’re looking to have the shells completed by year-end,” said Nourse. “The first companies should start moving in during March 2000.”
Asking rates for a full-service lease will be around $2 a square foot per month, he added.
“We’ve seen a lot of activity,” said Searles. “We think there’s still a lot of demand in the market for these projects and others built to suit a new type of corporate user interested in a campus environment with plenty of amenities.” n
