The Irvine Company has found a big-name financial tenant to occupy half the space at the office it is building along Pacific Coast Highway in Newport Center.
Bank of New York Mellon Corp. signed a lease for 20,486 square feet at 1600 Newport Center Drive, a two-story office that the Irvine Co.’s finishing work on near its headquarters at Newport Center.
The New York-based bank’s private wealth management operations for Orange County are set to be consolidated at the office.
BNY Mellon will be taking up the second floor of the building, known as Corporate Plaza West. Its name is set to be displayed on the top of the two-story office.
Financial terms of the 10-year lease weren’t disclosed. The Irvine Co. is marketing the remaining space at the building for $4.60 per square foot per month, according to the company’s Web site.
The low-rise building is the first office to be open in Newport Center in about four years. The Irvine Co. broke ground on the 40,000-square-foot building on Newport Center Drive about a year ago. It’s set to be completed in a few months.
BNY Mellon plans to move in October. It will be moving personnel from its existing wealth management office near John Wayne Airport at the Irvine Co.’s 4695 MacArthur Court. The bank, whose regional offices are led by David Emmes and David Holst, plans to add employees following the move.
Randall Parker and Mark Gardner from the Newport Beach office of tenant brokerage Travers Realty Corp. represented BNY Mellon in the lease. The Irvine Co. was represented by Mike Santley and Gary Gerson.
The relocation to Newport Center is the most prominent local change for BNY Mellon since it completed the $16.5 billion combination of Bank of New York Co. and Mellon Financial Corp. last year. The combined company has more than $1.1 trillion under management.
Before the combination, only Mellon Financial had a local wealth office. Bank of New York,founded by Alexander Hamilton and the oldest bank in the U.S. ,had no significant presence in OC prior to the deal.
BNY Mellon’s wealth management division provides investment management, wealth and estate planning and private banking services to individuals, family businesses and charitable organizations.
The relocation puts the bank “at the front and center of Fashion Island,” in a location that is more convenient to its customers, said Travers’ Parker.
BNY Mellon is the latest financial institution to grab prime space at the area’s most recent batch of offices, which have opened their doors in the past year.
Irvine’s Pathway Capital Management LLC and Wachovia Corp. are leasing big blocks of space at 2211 Michelson, the high-rise in Irvine’s airport area built by Hines Interests LP and Crescent Real Estate Equities Co.
Nearby, at Opus West Corp.’s 2050 Main St. building, Texas-based Guaranty Bank is consolidating its lending operations from Sacramento and San Diego.
In the Spectrum, UBS Financial Services Inc. is leasing the top floor of the Irvine Co.’s new 20 Pacifica tower.
Easy Leasing
Despite monthly rental rates that run more than $1 per square foot above what it is asking at its other new OC offices, and a sluggish leasing environment, the Corporate Plaza West building is likely one of the easiest leasing assignments for the Irvine Co.
The offices around Fashion Island,of which the Irvine Co. is the biggest landlord,are about 96% full, well above the 85% occupancy rates seen across the county.
Finding empty blocks of space of more than 10,000 square feet among the 2 million square feet of high- and low-rise space in Newport Center is next to impossible, according to Parker.
Elsewhere in the county, it’s a different story. There are 27 offices in OC that have more than 100,000 square feet of space available, according to CoStar Group Inc.
The demand for space at Newport Center has driven up rents in the area. At least one Irvine Co. deal topping $6 per square foot has been signed for a top floor at a local high-rise,a likely high-water mark.
The average asking rent in the county for the best office space now stands at about $3 per square foot.
Low-rise space in the area around Fashion Island isn’t as expensive as the high-rise buildings, but still is pricey. Rents run as high as $4.40 per square foot, according to the Irvine Co.’s Web site.
That doesn’t mean that deals can’t be made under a landlord’s asking rent,not to mention with significant tenant improvement concessions,for buildings like Corporate Plaza West, assuming it’s a quality tenant, according to Parker.
