Steve Bren, Nexus Plan 24 Buildings in Irvine Spectrum
By DANIEL D. WILLIAMS
Steven Bren, son of The Irvine Company’s Donald Bren, is making his first move into commercial real estate with plans to build and sell 24 small industrial buildings in the Irvine Spectrum with Santa Ana’s Nexus Development Corp.
An Irvine Co. vice president in the 1980s and a onetime luxury car dealer, Steve Bren has made his name in the custom home business, building mansions at Pelican Crest and Newport Coast. One of his homes was bought by Los Angeles Lakers star Kobe Bryant.
Now Bren and Nexus plan to build single- and two-story industrial buildings ranging in size from 4,960 to 15,000 square feet and going for $245 to $265 per square foot. Ground breaking on the first phase’s 12 buildings is set for March with completion by October.
Work on the second set of buildings should begin in late summer, said Jeff Bitetti, director of marketing at Nexus Development and who Bren referred questions to.
Nexus is responsible for Santa Ana’s Twin Towers of MacArthur Place, twin high-rises completed in 2001. Parent The Nexus Cos. also has a sizable tenant improvement business.
Three of the planned Spectrum buildings already are sold, Bitetti said.
“They’re geared toward the small business owner,” he said.
All three of the buyers fit the project’s model: design professionals, including architects and engineers, Bitetti said. The developers also plan to go after technology and biotechnology companies, he said.
Last spring, Steve Bren bought 15 acres of raw land from the Irvine Co. at Bake Parkway and the San Diego (405) Freeway and began putting together a plan.
“He had to buy it like anyone else,” Bitetti said.
In November, Bren brought Nexus into the fold, initially signing it on for construction services. After those initial talks, the two parties formed a partnership, Brenexus, with Bren expanding Nexus’ role to include management and marketing responsibilities.
“This was a good opportunity for us,” said Bitetti, adding Nexus had been looking for new ventures since finishing and leasing up the 400,000-square-foot Twin Towers.
“We realized you can’t just go out and build another 400,000-square-foot high-rise, just because the last one worked,” Bitetti said. “You have to go find project’s where there’s a demand.”
Smaller industrial buildings were hot last year, fueled by tenants looking to buy with low interest rates and real estate prices off their peaks.
Industrial buildings 30,000 square feet and smaller made up 85% of real estate activity in the fourth quarter, according to a report by CB Richard Ellis Services Inc.
“Buildings in the 6,000- to 10,000-square-foot range are seeing the greatest demand,” said Nat Harty, president of Stowe-Passco Development LLC, a builder that’s part of Santa Ana-based Passco Real Estate Enterprises Inc.
But are Nexus and Bren behind the curve? Interest rates, which have fueled the buying of smaller industrial buildings, could be higher come fall when the first buildings open.
“We realize (Alan) Greenspan could change things for us in a hurry,” Bitetti said. “So the project’s based on speed.”
Another worry: a million-plus square feet of vacant buildings in the Spectrum.
Brenexus isn’t looking to add to the business park’s glut of so-called flex-tech space, according to Bitetti. The project’s design isn’t for concrete tilt-up buildings, he said.
“We’re going for a different look and appeal, with more glass and open space,” Bitetti said. “Our target market is design professionals.”
Irvine-based Ware Malcomb is the project’s architect.
Brenexus reunites two school chums. Steve Bren and Bitetti have a history dating back to fifth grade in Newport Beach, when Bitetti said the two vied for the affections of the same girl.
“It all ended well,” Bitetti joked. “Nobody got hurt.”
If all goes well on this venture, Brenexus could see new phases on adjacent Spectrum land, Bitetti said.
Nexus meanwhile has another project in the works: its first apartment deal. The company recently bought six acres across the street from the Twin Towers.
A National Sports Grill sits on the land now. Nexus plans to move the sports bar nearby and build a 350-unit condominium and apartment project.
“We’re currently working with the city of Santa Ana,” Bitetti said.
