The Irvine Company has signed UBS Financial Services Inc. to take the top floor of 20 Pacifica, one of two office towers the company is building in the Irvine Spectrum.
It’s the largest and most notable lease deal the Newport Beach-based developer has struck for 20 and 40 Pacifica, the twin 15-story office towers it’s building alongside the San Diego (I-405) Freeway.
The two buildings will total about 624,000 square feet of space when completed. 20 Pacifica is scheduled to open later this fall, while the second building will be completed in mid-2008.
UBS will be leasing the entire 15th floor at 20 Pacifica, which runs roughly 20,600 square feet. The company plans to consolidate some of its operations throughout the county at the new space, according to brokers familiar with the deal.
The financial services company, which provides investment advisory and brokerage services, currently counts four local offices, in Brea, Mission Viejo, Newport Beach and Orange.
UBS has roughly 265 employees in the county, with an estimated 135 brokers. The company ranks No. 4 in the Business Journal’s latest list of largest stock brokerages in the county (see story, page 85).
The new office space at 20 Pacifica should be large enough to hold about 100 workers.
Terms of the deal weren’t disclosed. Neither the Irvine Co. nor UBS officials could be reached for comment.
A year ago, the Irvine Co. was marketing the top floors of the new buildings at monthly rates as high as $4.30 per square foot, making it one of Orange County’s most expensive places for office space outside Newport Coast. Rates for the new buildings no longer are being quoted on the company’s Web site.
Developers of office towers in Irvine need to charge lease rates of $3.50 to more than $4 per square foot per month in order to justify development costs of more than $375 per square foot, according to Grubb & Ellis Co. officials.
There’s still a gap in pricing between asking rents at high-end existing towers and what developers need for their new buildings. Asking rents for the county’s best buildings average a monthly rate of about $3.27 per square foot, following a roughly 10% hike during the past year.
Despite the steep asking rents, the slow rate of leasing at the county’s new offices in the past year and rising vacancy rates in OC likely provided UBS with some strong bargaining power, brokers said. Less than 20% of the space for the six new offices being built in the Spectrum and around John Wayne Airport in Irvine has been leased to date.
The lease at 20 Pacifica should allow UBS to have its name on the building, but probably not on the top of it, according to brokers. Irvine Co. is likely looking to land a multifloor lease for the building and that tenant would receive top signage.
The UBS lease more than doubles the amount of reported leased space at 20 Pacifica. Tenants announced so far have included niche law firms and smaller financial planning companies.
Financial services firms like UBS have been behind a few of the larger lease deals seen at the six office towers being built in Irvine.
Irvine’s Pathway Capital Management LLC, an investment manager, was the first big lease announced at 2211 Michelson, the 265,000-square-foot office tower that Houston-based Hines Interests LP and Crescent Real Estate Equities Co. of Fort Worth, Texas, opened in the summer.
Pathway’s lease is for 37,250 square feet, or about two floors.
Also taking space at 2211 Michelson: Wachovia Corp., the country’s fourth-largest bank. It now has a new centerpiece for its amassed operations in OC.
The Charlotte, N.C.-based bank is leasing 25,400 square feet at the building.
A few other financial services firms are said to be looking for full floors of space, according to brokers.
Meanwhile, another big lease that got away from the Irvine Co. was back in the news last week.
Rutan & Tucker LLP, OC’s largest law firm said last week it had completed the build-out of an additional 12,000 square feet of office space at its local headquarters at 611 Anton Blvd., in Costa Mesa. The firm now leases 112,000 square feet at the Pacific Arts Plaza Tower 2 office, which is owned by Maguire Properties Inc.
The Irvine Co. made a big push to land Rutan & Tucker as an anchor tenant for the Pacifica buildings late last year. The firm, which counts about 150 lawyers, ultimately decided to stay put and expand. The new space will accommodate about 40 lawyers and staff.
