A financial services division of General Electric Co. is consolidating two of its big Orange County offices at Irvine’s Jamboree Center.
GE Capital Solutions, which provides equipment and transportation leasing and lending services to businesses, just struck a deal with The Irvine Company for a 51,000-square-foot lease, at the Newport Beach-based landlord’s 4 Park Plaza office tower.
It’s one of the larger office deals announced this quarter, made amid a slow leasing environment that’s seen OC’s office vacancy rate creep up to about 12%.
GE Capital is moving roughly 100 employees from offices it had in Anaheim to 28,000 square feet of space at the Irvine Co. building. The move is expected in July.
A division of the company that focuses on small business financing had been based locally at Maguire Properties Inc.’s Stadium Towers Plaza building at 2400 E. Katella Ave.
The deal also includes a five-year renewal for 23,000 square feet at 4 Park Plaza that GE Capital already occupied.
GE Capital is consolidating a number of its offices nationwide, said Rick Sherburne, executive director with the Irvine office of Cushman & Wakefield Inc. A few more local offices that the company has could be consolidated in the next year or so, he said.
The financing group’s local employees include more senior-level executives and sales staff, rather than administrative employees. It made more sense for the offices to be moved to Irvine, rather than Anaheim, said Sherburne, who along with Cushman & Wakefield’s Travis Boyd and Alex Hayden represented GE Capital in the lease.
A few other offices in Irvine, including those owned by Los Angeles-based Maguire, had been considered before the decision was made to combine operations at Jamboree Center, the five-tower, 1.6 million-square-foot campus just off the San Diego (I-405) Freeway and Jamboree Road.
Terms of the deal weren’t disclosed. Monthly asking rents at 4 Park Plaza run from $3.25 to $3.75 per square foot, according to the Irvine Co.’s Web site.
The average monthly rental rate for high-end space around John Wayne Airport runs about $3.27 per square foot, up about 10% from a year ago.
Rental rates are largely holding up in office lease transactions, although the amount of concessions landlords are offering in lease deals continue to go up, Sherburne said.
“There’s not been a lot of erosion in rates, yet. But once concessions (are extinguished), they’ll be next to fall,” he said.
Next year will likely be the big test to see if continued givebacks by the county’s floundering mortgage sector lead landlords to negotiate more on rates.
Another big chunk of Irvine office space is expected to be put back on the market, according to brokers.
Last week, H & R; Block Inc. failed in its yearlong bid to sell Irvine’s Option One Mortgage Corp. to private equity firm Cerberus Capital Management LP.
Option One had been leasing close to 250,000 square feet of space in multiple offices around the Irvine Spectrum. Most of the leases were initially signed about five years ago.
At least two of Option One’s biggest leases, at 3 Ada and 8105 Irvine Center Drive, were with the Irvine Co. As a result of the nixed deal, the Kansas City-based tax and accounting services company last week said that Option One has stopped making loans and will close that part of its operations. H & R; Block also plans to sell Option One’s mortgage-servicing business.
The closure of Option One’s mortgage business will result in 620 lost jobs. Most of those jobs are likely in OC.
