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Verizon Job Cuts Prompt Give-Back on Lease

A portion of the regional headquarters of Verizon Wireless in the Irvine Spectrum will be converted into a multitenant office park, a result of the telecom’s recent decision to trim its local head count by more than 40%.

The Basking Ridge, N.J.-based company, the largest mobile network operator in the U.S., plans to give back two of the five buildings it leases at the Verizon Wireless Center campus to its landlord, Newport Beach-based Irvine Company, early next year.

Those two buildings, which total about 135,000 square feet, will be turned into office space for smaller tenants, according to Irvine Co. executives, who plan to begin marketing the space soon.

Verizon Wireless will continue occupying the other three buildings at the 30-acre campus on Sand Canyon Avenue, which it occupies under a long-term lease. Those offices total about 320,000 square feet.

Local Call Center

The give-back comes after a Verizon Wireless announcement last month that it’s closing its Irvine call center, one of five in the U.S. that it will shutter.

The moves will affect more than 5,000 employees around the country, including nearly 1,100 people at the Irvine campus.

Employees at the Irvine call center have been offered relocation packages, according to the company, which is consolidating its call center operations to 22 locations elsewhere in the U.S.

The moves are “a regular part of our operational approach to look at the best use of open space in all our centers,” said Ken Muche, spokesperson for the Southern California operations of Verizon Wireless, a unit of New York-based Verizon Communications Inc.

More than 1,300 Verizon Wireless employees will continue to work at the Irvine campus, which serves as the company’s West Area and Southern California headquarters.

Verizon plans to keep marketing, regional sales, human resources, legal and training operations at the Irvine campus, according to Muche.

Verizon Communications and its affiliated companies ranked as Orange County’s 23rd-largest employer last year, with an estimated 3,265 workers in the county last year. The company had owned a 55% stake in Verizon Wireless prior to last month, when it paid $130 billion to acquire the remaining minority stake in the company from London-based Vodafone Group.

The give-back in space will result in one of the larger chunks of empty space in the Irvine Spectrum, where the office market totals nearly 10 million square feet.

CoStar Group Inc. records show only a handful of Spectrum buildings having more than 50,000 square feet of available space for larger users, although Irvine Co. appears to be positioning the two buildings Verizon Wireless is giving back for tenants needing less space than that.

“We’ll be adding lobbies, wayfinding signs and individual addresses for the buildings, which now all share the same Sand Canyon address,” said Irvine Co. spokesperson Mike Lyster. “With a prime location at the western edge of the Irvine Spectrum, we expect to see significant interest in the space.”

Irvine Co. bought the five-building campus in 2005, at a price rumored to be about $140 million.

In the 1990s, it sold the land for the campus to L.A.-based developer Lowe Enterprises Commercial Group, which built the 475,000-square-foot campus for Verizon Wireless—then known as AirTouch Cellular—in 2000.

The call center operations opened at the campus a year later.

2009 Lease

Irvine Co. signed one of the larger local office deals of the past five years when it got Verizon Wireless to renew its lease at the five-building campus in a 10-year deal in 2009, at the depths of the recession. Terms of that lease were not disclosed, nor were the financial ramifications of Verizon’s recent decision to give back the two buildings.

Verizon received offers for relocating its local operations outside OC and California before renewing its lease here, Irvine Co. officials said at the time.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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