BIG OFFICE SALES
Top OC office sales in the fourth quarter
BANK OF AMERICA BUILDING
275 Valencia Ave.
Brea
$94 million
Buyer: Wells Brea I LP
Buyer rep: in-house
Seller: PIC Realty Corp.
Seller rep: Eastdil Realty Co.
PRINCIPAL FINANCIAL PLAZA
2415 Campus Drive
Irvine
$8.2 million
Buyer: CVK Partners LP
Buyer rep: Faris Lee Investments
Seller: Principal Life Insurance Co.
Seller rep: CB Richard Ellis Inc.
PRINCIPAL FINANCIAL
PLAZA
2415 Campus Drive
Irvine
$8.2 million
Buyer: CVK Partners LP
Buyer rep: Faris Lee Investments
Seller: Principal Life Insurance Co.
Seller rep: CB Richard Ellis Inc.
MACARTHUR CORPORATE
CENTER
17661 Cowan Ave.
Irvine
$8 million
Buyer: LGI LLC
Buyer rep: Lee & Associates
Commercial Real Estate Services Inc.
Seller: 17661 Cowan Avenue
Associates LLC
Seller rep: in-house
LA PALMA
PROFFESIONAL CENTER
7872 Walker St.
La Palma
$6.9 million
Buyer: Tridiamond LLC
Buyer rep: TLC Realty
Seller: La Palma Medical Arts Center
Seller rep: Cushman & Wakefield Inc.
2381 MORSE AVE.
Irvine
$5.5 million
Buyer: Squeal Like a Pig LLC
Buyer rep: Beitler Commercial
Seller: Irvine Office Venture LLC
Seller rep: Collins Commercial
TRAVCOA BUILDING
2350 SE Bristol St.
Newport Beach
$4 million
Buyer: RU Investments LLC
Buyer rep: Voit Commercial Brokerage
Seller: Frederick Phillips Trust
Seller rep: Collins Commercial
PARK MITCHELL BUILDING
17731 Mitchell
Irvine
$3.2 million
Buyer: Swinterton Real Estate Inc.
Buyer rep: Cushman & Wakefield Inc.
Seller: Gary T. Wescombe Trust
Seller rep: Voit Commercial Brokerage
TAKING OFFICE SPACE
Largest OC office leases in the fourth quarter
25 ENTERPRISE
Aliso Viejo
137,325 square feet
Term: 7.5 years
Landlord rep: CB Richard Ellis Inc.
Tenant: Lennar Corp.
Tenant rep: Lee & Associates
Commercial Real Estate Services Inc.
1600 DOUGLASS ROAD
Anaheim
127,750 square feet
Term: five years
Landlord rep: Trammell Crow Co.
Tenant: Ameriquest Mortgage Co.
Tenant rep: Newport Commercial
Realty Advisors
18200 VON KARMAN AVE.
Irvine
73,094 square feet
Term: two years, 10 months
Landlord rep: Transwestern Commercial
Tenant: Epicor Software Corp.
Tenant rep: Real Estate &
Logistics Technology
1400 DOUGLASS ROAD
Anaheim
69,068 square feet
Term: five years
Landlord rep: Trammell Crow
Tenant: Washington Mutual Inc.
Tenant rep: CB Richard Ellis
250 COMMERCE DRIVE
Irvine
53,360 square feet
Term: unknown
Landlord rep: The Irvine Company
Tenant: Centex Homes Inc.
Tenant rep: CB Richard Ellis
17461 DERIAN AVE.
Irvine
44,977 square feet
Term: unknown
Landlord rep: Grubb & Ellis Co.
Tenant: Solstice Capital Inc.
Tenant rep: CB Richard Ellis
975 IMPERIAL HIGHWAY
Brea
41,075 square feet
Term: unknown
Landlord rep: Cushman & Wakefield Inc.
Tenant: Alta Resources Corp.
Tenant rep: The Saywitz Co.
15360 BARRANCA PARKWAY
Irvine
39,060 square feet
Term: unknown
Landlord rep: Irvine Co.
Tenant: MDS Inc.
Tenant rep: The Staubach Co.
7505 IRVINE CENTER DRIVE
Irvine
22,097 square feet
Term: unknown
Landlord rep: Irvine Co.
Tenant: Teletech Labs Inc.
Tenant rep: in-house
Vacancy Drops, Absorption Gains, Lease Rates Flat
Orange County’s office market continued along the recovery road in the fourth quarter.
Although the demand for class A space represented 78% of the total absorption in 2003, the lower-cost class B and low-rise buildings saw the most activity during the second half of the year.
Tenants also showed interest in cheaper space during 2003 by absorbing a large amount of sublease space.
The amount of vacant sublease space in Orange County fell from more than 2.1 million square feet at the end of the first quarter to 1.3 million square feet at the end of the year.
Vacancy
The continued increase in tenant activity caused the county-wide vacancy rate to drop again this quarter from 14.7% to 14.1%.
Of the five market areas in Orange County, the greater John Wayne Airport area saw the largest decrease in vacant square feet during 2003, dropping from 18.2% at the end of the first quarter to 14.7% by the end of the year.
Central County remains the tightest market in the county with 11.5% of its rentable square feet still vacant. North and West County were the only markets to post an increase in vacancy rates this quarter. The two areas sit at 12.2% and 15.9%, respectively.
Net Absorption
Improved economic factors sparked continued positive absorption of office space in Orange County through the last three quarters of 2003.
In the fourth quarter alone, there was more than 820,000 square feet of positive absorption in Orange County, which surpassed last quarter’s performance.
Most of the positive absorption in the fourth quarter occurred in the county’s two most southern markets, South County and the greater John Wayne Airport area.
While not posting quite as robust of a performance, North County and Central County also posted positive absorption levels, indicating growing demand in the area. West County was the only market to report negative absorption this quarter.
Lease Rates
The average asking lease rate for office space in Orange County remained flat at $1.96 per square foot this quarter. The current asking rate is eight cents below its level one year ago and 34 cents lower than the high mark of $2.30 in early 2001.
The recurring quarters of positive absorption have nearly flattened out the descent of average asking rents, and continued tenant growth in 2004 likely will reverse the downward trend altogether.
Construction
Three projects finished construction in the fourth quarter, adding more than 300,000 square feet to the base.
With only one new project breaking ground in the fourth quarter, construction levels fell again this quarter to about 712,000 square feet.
Small building for sale projects continued to be in high demand through the end of the year and represent more than 307,000 square feet of office space being built.
More than 6 million square feet of space is in the planning phase until potential occupants are identified.
An economic boom could spark a flurry of new construction in Orange County.
Analysis provided by CB Richard Ellis’ Information Management Department.
