New Century Financial Corp. is looking at making a big move to Irvine’s Park Place,including the possible construction of an office tower at the campus.
The mortgage company, now based a couple of blocks away in Irvine, is close to signing a lease for 480,000 square feet of space at Park Place, according to real estate sources.
The deal could include the building of a 425,000-square-foot office tower, with New Century taking about half of the high-rise space, they said.
According to sources, New Century signed a letter of intent for the space last week with Los Angeles-based Maguire Properties Inc., which bought Park Place in two separate deals earlier this year.
Park Place is a sprawling 105-acre complex at the corner of Jamboree Road and Michelson Drive near John Wayne Airport.
It could take months to hammer out details of the lease, which likely would be Orange County’s biggest of the year, sources said.
New Century declined to comment, citing its Oct. 1 stock offering and conversion to a real estate investment trust that buys subprime mortgages. Subprime mortgages are home loans made to people with imperfect credit.
Maguire Properties also declined to comment. Brokers aware of the deal asked not to be named.
New Century is moving to consolidate many of its 1,700 workers here in one spot. Not all employees are expected to move, sources said.
The company now leases more than 300,000 square feet at various spots in the county, including its headquarters at 18400 Von Karman Ave.
New Century plans to keep space at the Von Karman high-rise, though it will decide later whether to move its headquarters to Park Place, sources said.
New Century raised $783 million in its stock offering earlier this month. It sold 13.5 million shares at $58 per share and switched from Nasdaq to the New York Stock Exchange.
The move was the culmination of plans detailed in April to convert to a REIT. The conversion ends what some call “double taxation” of profits, with corporations paying income taxes and then shareholders anteing up on dividends they receive.
REITs don’t pay corporate income taxes. They must pay at least 90% of taxable income to shareholders as dividends.
If the lease goes through as planned, it would be a major boon to Maguire Properties. The lease with New Century would fill up Park Place and could add a new office building to the complex.
Maguire bought Park Place for a total of $475 million. In July, Maguire paid $215 million for 90 acres, the biggest chunk of Park Place, from Irvine-based Crow Winthrop Development LP.
The acquisition included 317,000 square feet of offices and shops and the right to develop up to 2 million square feet of commercial space on the site.
In April, Maguire paid $260 million to New York-based Blackstone Group LP for 15 acres at Park Place. The deal included 1.75 million square feet of office space originally built for Fluor Corp., which now is based in Aliso Viejo.
New Century is said to be planning to occupy several buildings at Park Place. Plans include taking 75,000 square feet or so in an existing six-story office building at 3121 Michelson.
The company also could take some 80,000 square feet being vacated by Seattle-based Washington Mutual Inc., another 80,000 square feet or so of unused space leased by Omaha, Neb.-based ConAgra Foods Inc., plus additional space, according to sources.
Despite a pullback in home loan refinancing, some mortgage companies continue to expand here. Subprime lenders such as New Century and Orange-based Ameriquest Mortgage Co. are among the largest users of office space in the county.
“Mortgage companies continue to grow despite the belief that interest rates are going to increase a little bit,” said Tom Murphy, vice president and leasing director with Jones Lang LaSalle in Irvine. “They must have appropriate lines of business to guard against simple movements in rates.”
He said the end result is good for the office market.
“It tightens the market in Orange County and near the airport,” Murphy said. “It tightens it significantly with little real construction planned.”
Murphy said office rents already are on the rise at Newport Center in Newport Beach and should rise in other areas of the county. He said rents could rise faster than people think.
Vancouver, British Columbia-based Bosa Development Corp. is building two condominium towers at Park Place and plans another four, though those could be far into the future.
In August, the Irvine office of Phoenix-based Opus West Corp. and Scottsdale-based Geoffrey H. Edmunds & Associates Inc. submitted plans to the city of Irvine to nix a five-story office building and build a third condo high-rise on Jamboree.
