Allergan Inc. has created its own island in Irvine.
The slow real estate market and legal issues have helped the drug maker keep its sprawling campus pretty insulated. And Allergan has made it a mission to maintain a buffer by buying available buildings around its headquarters.
The maker of wrinkle remover Botox and eye and skin drugs just added another to its city block-long campus,a low-rise office building on Michelson Drive that borders its campus near John Wayne Airport.
Terms of the deal weren’t disclosed. Brokers estimate the property sold for about $15 million.
With sales at a minimum amid the credit crunch and real estate downturn, the buy of the 67,000-square-foot office building is the largest local office deal in the past few months, according to Colliers International.
The building includes the local offices of San Diego-based Roel Construction Co., hotel consultancy Atlas Hospitality Group and offices for Alliant International University.
Tenants at the building said Allergan hasn’t announced any plans for the offices. In recent years, Allergan has moved some of its own operations into other low-rise offices it has bought nearby on Michelson Drive.
Allergan expects to keep the building, at 2500 Michelson Drive, as office space, the company said. The property’s previous owners had proposed tearing down the low-rise office building and building high-rise condominiums, to the consternation of the drug maker.
As recently as a year ago, the property’s prior owner had envisioned building up to 208 condos and 220 hotel rooms in a high-rise tower.
That plan was scrapped midyear as the real estate market continued to sour.
It’s not the first time Allergan’s spent heavily to provide a buffer between its campus and a proposed housing development in the 2,800-acre commercial area known as the Irvine Business Complex.
In 2006, Allergan paid $20 million for two additional office buildings on Michelson Drive that totaled about 70,000 square feet. The property’s prior owners had considered building 186 condos next to Allergan’s campus.
In 2005, the drug maker, which counts about 2,400 local employees, snapped up another 4 acres of property that bordered its campus along Von Karman Avenue.
Campus Investments
The company’s spent even more in the past few years on additions to its existing campus than it has buying nearby buildings.
The campus has seen more than $125 million in new buildings in the past five years. Allergan added a $75 million, 175,000-square-foot research and development facility in 2004 and a $50 million lab in 2005.
In 2007, the company approved the investment of up to $95 million for another office building on its campus. Construction is expected to start this year, the company said in filings last year with the Securities and Exchange Commission.
There’s one big chunk of land across the street from the Allergan campus, between Jamboree Road and Teller Avenue, that is set for redevelopment.
Houston-based Hines Interests LP plans a mixed-use campus known as California Green at the site, which was largely demolished about a year ago. The campus is slated to include 785,000 square feet of environmentally-friendly office space, along with 15,500 square feet of shops and restaurants.
Newport Beach and Tustin recently filed a lawsuit in Orange County Superior Court over the project, saying more thorough environmental and traffic studies were needed before moving ahead.
The two cities have used lawsuits to stop other housing projects in the Irvine Business Complex, but this is the first non-housing project that’s been specifically targeted by the neighboring cities.
The three-block-long Hines project, which Irvine signed off on last year, likely is to remain undeveloped for a few years, regardless of the latest lawsuit, because of the tough office market in OC.
Skatepark
The site’s now an unofficial skate park. Skateboarders disregard the temporary security fences and do-not-enter signs. Police routinely chase off more than a dozen boarders at a time from the site.
Not every longtime business in the area is happy about the slowdown of development around the IBC.
Just across the Irvine city line in Newport Beach, Conexant Systems Inc. had been looking to turn a large chunk of 25 acres of land it owns along Jamboree Road into condos.
About 17 acres of land the chipmaker owns is in the beginning stages of being rezoned for mixed use, the company said. Early plans call for about 1,000 homes.
In a twist, Irvine officials last month announced their opposition to the Newport Beach project, saying the city hadn’t completed the necessary environmental and traffic studies.
Newport Beach’s opposition to the Hines office project was likely “the straw that broke the camel’s back,” and prompted Irvine to file its own complaint, said Tim Strader Jr., principal for Irvine-based Starpointe Ventures, a development consultant that’s worked on a number of projects in the area.
Conexant said in regulatory filings it couldn’t estimate the time frame in which the company will complete the entitlement process for the proposed project.
