Leasing still is slow in Orange County offices, but don’t blame five of the area’s more established employers for the stagnant market.
Blizzard Entertainment Inc., Broadcom Corp., Cisco Systems Inc., Fluor Corp. and Raytheon Co. combined have expanded their local office space by nearly half a million square feet during the past year.
That figure doesn’t include Broadcom’s move into its new eight-building, 685,000-square-foot campus in early 2007,an expansion of more than 200,000 square feet for the Irvine-based chipmaker,which had been in the works since early 2005.
Among recent expansion deals: Cisco Systems and its Irvine-based Cisco-Linksys LLC division are adding a fourth building to its OC operations.
The company’s in the process of moving into a 63,440-square-foot office at 131 Theory, alongside three additional buildings it leases, according to officials for Newport Beach-based The Irvine Company, the landlord for the property.
The seven-year lease was signed at the end of 2007. Cisco, which employs about 300 people in the county, now rents about 200,000 square feet of office space in Irvine’s University Research Park.
In another Irvine Co. transaction, Fluor last month signed a 63,000-square-foot lease in the Irvine Spectrum, at 43 Discovery.
Two years ago, when the company was preparing to move its corporate headquarters from Aliso Viejo to Irving, Texas, Fluor wasn’t in Irvine. Following the most recent deal, it now leases 278,000 square feet in five Spectrum-area buildings, according to Steven Case, senior vice president of leasing for the Irvine Co.
Fluor, OC’s largest engineering and construction company, has seen the most growth in office space of any local company since mid-2007. Following the latest lease, it has expanded its local operations by nearly 200,000 square feet since last year, according to Case.
Fluor officials said in April that they’re planning to add about 200 OC employees this year, after hiring 660 employees in 2007.
“There is activity in the marketplace. We’re seeing pockets of growth,” Case said.
The Irvine Co. deals follow last month’s news that defense contractor Raytheon was expanding into Brea. In one of the largest office deals announced this year, Raytheon signed a 78,000-square-foot lease for a building owned by Los Angeles-based Maguire Properties Inc.
Big Deals Not Expected
The large deals are not expected to be duplicated any time soon as companies are shedding jobs.
Chapman University economists last week forecast a 1.2% decline in the county’s total employment for 2008, representing a loss of about 18,000 jobs.
It’s expected that once second-quarter figures are compiled, OC’s office market will have posted more than a million square feet of negative net absorption for the first half of 2008.
With the exception of Raytheon, all five expanding companies have directly benefited from last year’s relocation of Broadcom from the Irvine Spectrum to it new 685,000-square-foot campus in University Research Park.
When Broadcom moved across town, it left behind some 445,000 square feet of space in the Spectrum area.
The Irvine Co. spent much of the past year backfilling that space, while also trying to accommodate growth,both in the Spectrum area and the tighter office market surrounding the campus of the University of California, Irvine,for some of its larger tenants. Case likens the landlord’s work to managing a chessboard.
Blizzard and Fluor moved across town, from University Research Park to the Spectrum, taking up much of Broadcom’s old space there. Blizzard grabbed three buildings at the remodeled Alton Corporate Center totaling 235,000 square feet of space,about twice the size of its old headquarters.
Fluor snapped up space in another two of Broadcom’s old Spectrum buildings, including last month’s lease.
Cisco in turn has moved into Blizzard’s old space in University Research Park, while Broadcom late last year signed an additional 63,000-square-foot lease in University Re-search Park at 5211 California. That building was previously leased to Fluor.
Case said he expects additional growth in the near-term for Blizzard, Broadcom, Cisco and Fluor.
