Fluor Corp., the largest engineering and construction company operating in Orange County, isn’t slowing down its local expansion.
In late June, I wrote a page 1 story on how Fluor,along with Blizzard Entertainment Inc., Broadcom Corp., Cisco Systems Inc. and Raytheon Co.,had bucked the slowing office market by expanding by nearly half a million square feet during the past year.
Since then, Irving, Texas-based Fluor, which has seen the most growth in office space of any local company since mid-2007, has leased another midsize building in the Irvine Spectrum’s Discovery Business Center.
The lease was for 44,000 square foot at 41 Discovery, a building previously used by chipmaker Broadcom before it moved to its new campus in University Research Park. Fluor will be moving into the building in October.
Terms of the lease weren’t disclosed. Other office buildings in Discovery Business Center are being marketed at monthly rates of about $1.80 per square foot.
Fluor now leases about 322,000 square feet of office space in the Spectrum in six buildings, according to Steven Case, senior vice president of leasing for The Irvine Company, landlord for the buildings.
Officials for Fluor said in April that they’re planning to add about 200 local employees this year, after hiring 660 employees in 2007. The company is growing with demand for its services in the oil and gas industry.
Koll Still Buying
Koll Co. of Newport Beach still is on the search for real estate to buy.
The real estate developer and investor paid $39.9 million, or about $127 per square foot, for a 313,367-square-foot business park in Upland, on the line between Los Angeles and San Bernardino counties.
College Business Park counts 17 single-story industrial, office and flex buildings on a 25-acre site near Claremont Colleges.
The property was acquired by a limited liability company owned by Koll and long-time investment partner the Public Employee Retirement System of Idaho. The partnership now owns more than 6 million square feet of industrial and suburban office space in six states.
It’s the first deal the partnership announced this year. Koll officials said in May the company planned to spend $500 million on acquisitions in the next two years.
The College Business Park’s seller was Wohl Investment Co., based in Newport Beach.
RESIDENTIAL
Don’t pin all the blame for the run-up in home prices and subsequent housing crash on Orange County’s subprime mortgage industry, said a recent study led by the University of California, Irvine’s Paul Merage School of Business Center for Real Estate.
A 2003 pullback by government-sponsored mortgage investors Fannie Mae and Freddie Mac and their replacement by aggressive, private mortgage securities issuers is the main culprit for the drastic price increases in housing that peaked in early 2006, the study said.
“We were quite surprised to find the intensity of subprime lending was insignificant after controlling for all the other factors influencing the market, but we were really blown away when Fannie’s and Freddie’s continuing presence in the market was shown to be so important,” said Kerry Vandell, UC Irvine finance professor.
In 2003, political, regulatory and economic factors,including accounting irregularities that led to executive resignations and caps on loan portfolios,forced Fannie Mae and Freddie Mac to significantly slow their mortgage buying, the report said.
Private funding in the form of asset- and mortgage-backed securities soon replaced conventional, conforming mortgage-backed securities as the prevalent source of mortgage money.
The new credit environment in turn allowed looser underwriting standards and increased tolerance for riskier, high-yield loan products.
The UCI research included input from Michael LaCour-Little, a finance professor at California State University, Fullerton, whose primary focus is real estate. Funding for the research came in part from Freddie Mac and the Mortgage Bankers Association.
H & #244;m Office
Newport Beach-based H & #244;m Real Estate Group, a brokerage that focuses on high-end coastal homes, is opening an office in Huntington Beach next month.
It will be H & #244;m’s first office expansion outside Newport Beach. The company, which started up operations in 2006, also is planning an additional office on Lido Isle in the next six months, the company said.
Bascom Buys
Irvine-based apartment investor Bascom Group LLC paid $60.8 million, or $108,815 per unit, for Gleneagles Apartments, a 562-unit complex in Northglenn, Colo., a suburb of Denver.
Bascom’s now owns 19 complexes in the Denver area, totaling 6,880 apartments. Principal Life Insurance Co. was the seller of the Gleneagles complex.
The apartments are situated on 24.2 acres and consist mostly of two- and three-bedroom units. The complex was built from 1999 to 2002.
