Costa Mesa’s Emulex Corp., a maker of electronics for data storage networks, is set to expand its local office presence. But the news won’t help fill any of the new, vacant offices already built across the county.
Emulex recently got city approval to construct a fourth building next to its existing corporate headquarters, along Susan Street in Costa Mesa. The company moved to the 14.5-acre campus about five years ago and already owns the land where the two-story office is planned.
The 65,435-square-foot building is set to begin construction by early October, and is scheduled to be completed next August.
It would be the fourth and final building at Emulex’s campus, and its second largest. All told, the campus will total 237,611 square feet after the final building’s completion. The campus holds the company’s corporate offices and main product development facilities.
Emulex, which employs about 370 people locally, told the city that the new building will be used for general office space, conference facilities and support areas for corporate training.
Redwood City-based DPR Construction Inc., which has a Newport Beach location, is building the office. Irvine-based LPA Inc. is the architect for the building, which will be built to environmentally friendly standards set by the U.S. Green Building Council.
Most tenants looking for office space, either to own or lease, are now demanding that new buildings have green, sustainable features, said Stephen Tiner, an associate with LPA.
“A lot of Emulex’s customers are going very sustainable; there’s a lot of corporate peer pressure,” Tiner said.
There’s also pressure coming from OC cities. Costa Mesa requires all new municipal construction,regardless of size or cost,be certified at the “gold” standard for green buildings, as determined by the Leadership in Energy and Environmental Design, or LEED. That’s one level above the LEED rating now needed for all state-owned construction or major renovation projects.
In Irvine, all construction or major renovation of city buildings larger than 5,000 square feet must achieve LEED certification, according to New York-based brokerage Studley Inc.
Typical features in a green building include water-efficient landscaping, reduced water use inside the office, on-site renewable energy sources, the use of recycled materials in the building’s construction and increased ventilation in the building.
Other than the use of more glass, the actual outward appearance of the new building won’t be too much different from the rest of the campus, according to Tiner.
Not Much Development
Emulex’s decision to build office space is a rarity for OC these days. The volume of office construction under way in the county is down sharply from a few years ago.
Only about 325,000 square feet of office space is being built in the county, compared with some 1.4 million square feet of office development completed in the first half of the year, according to the Irvine office of Voit Commercial Brokerage LP.
Another 7 million square feet of office space is planned for the county, but developers have yet to break ground because of the slow economy and difficulty finding tenants.
OC’s office vacancy rate now is more than 15%, nearly double what it was a year ago.
Most local developers now say they’ll need a large tenant precommitted to a project before breaking ground.
The construction will be the first big local expansion for Emulex in a little more than five years.
Emulex announced in 2002 it had entered an agreement to relocate its headquarters from Harbor Boulevard to the campus, which at the time was a bean field owned by Costa Mesa’s C.J. Segerstrom & Sons LLC. Emulex had taken about 90,000 square feet at its old Harbor Boulevard office.
The original agreement called for a 10-year lease of the property, with an option to buy the land and buildings during the first six months of the lease. Emulex, which currently counts a market value of about $1 billion, bought the property in 2004 shortly after moving into the site.
At the time, the cost for the land and original three buildings was estimated to be $47 million, according to filings with the Securities and Exchange Commission.
The cost of the new building has not been disclosed.
Besides Costa Mesa, Emulex also leases facilities elsewhere in California, along with Colorado, Massachusetts, Washington and Bangalore, India, primarily for engineering and development.
It also counts about 19 other remote offices, mostly for sales.
