COMMERCIAL
While mortgage companies continue to lease up large blocks of space, other tenants have stepped up to the plate lately,a good sign for the office market.
Law firms have been among the most active.
In fact, law firms have accounted for much of about 200,000 square feet in recent leasing activity at high-rises owned by C.J. Segerstrom & Sons in Costa Mesa.
The biggest deal: Los Angeles-based law firm Sheppard, Mullin, Richter & Hampton LLP expanded its lease at Center Tower in Costa Mesa.
The law firm signed a 12-year lease for about 55,000 square feet. The dollar value wasn’t disclosed. Industry sources peg the lease at $27 million, or roughly $3.40 per square foot per month.
That price tag is on the higher end of what the market has seen lately,except in Newport Center in Newport Beach.
Also, the Sheppard, Mullin lease stretches out for more than a decade. Most brokers expect rates to begin moving up next year.
Royce Sharf of Studley Inc. represented Sheppard, Mullin. John Barganski, marketing director for The Offices of South Coast Plaza, handled the other side of the deal.
“Leasing activity has been very strong this year and we have been able to raise the occupancy level of our portfolio above 93%,” Barganski said in a statement. “These market dynamics support our plans to implement significant rental rate increases in all of our properties in 2005.”
Center Tower now is about 92% occupied. The granite-clad, 21-story tower has been marked as the tallest in the county by an online site about skyscrapers. Barganski said it’s exactly equal in stories and feet, 285, to nearby Plaza Tower.
Other law firms taking space:
Miami-based Greenberg Traurig LLP leased 14,000 square feet at Center Tower. Kevin Bender of CB Richard Ellis Group Inc. represented the law firm.
Real estate law firm Garrett DeFrenza Stiepel leased 7,500 square feet in Park Tower.
McKasson, Klein & Holmes relocated from Long Beach into 6,000 square feet at Plaza Tower.
Other companies have taken space in Segerstrom’s towers in recent months.
One of the largest deals was by Commerce Energy Corp., which took 39,000 square feet for its headquarters in Plaza Tower. Alex Hayden of CB Richard Ellis represented the company.
Banks and other financial companies also have been active. WMC Finance Corp. took 22,000 square feet in Plaza Tower. WMC was represented by Carl Muhlstein and John Gallivan of Cushman & Wakefield Inc.
Aside from lease deals, the biggest commitment to OC by a law firm in recent months was the dramatic buy of the 14-story high-rise at 2040 Main St. in Irvine by Knobbe, Martens, Olson & Bear LLP.
The law firm paid $106.5 million for the high-rise that serves as its headquarters.
The firm matched a bid made by The Irvine Company, sources said, exercising an option in its lease contract with the Irvine office of Phoenix-based Opus West Corp.
Brokers said the law firm bought the building to avoid future rent hikes and for the tax benefits from depreciation.y
RESIDENTIAL
Some changes are in the works for Irvine-based land brokerage O’Donnell/Atkins.
The company recently promoted Randy Teteak to president. He previously served as senior vice president and director of operations.
“I have known Randy for 15 years,” said Craig Atkins, who founded the company with partner Mackey O’Donnell. “He is one of the most driven and talented individuals I have ever met.”
The brokerage also created a new position, chief operating officer, and placed Tony Eaton in the spot.
Teteak, 38, said the two founders want to focus more on doing deals and leave management in the hands of others.
Teteak said he also will do deals, but his other responsibility is to grow the company. He oversees 27 brokers.
O’Donnell/Atkins is on track to do nearly $1 billion in land deals this year, he said.
The company hopes to have a Sacramento office open soon and will target the East Bay in 2005. O’Donnell/Atkins now has offices in Irvine, San Diego, Los Angeles and Victorville, he said.
“A lot of our clients are asking us to grow with them,” Teteak said. “It’s an affirmation that we are doing the right thing.”
O’Donnell/Atkins is working on a couple projects in Sacramento for Irvine-based developer SunCal Cos., according to Teteak.
The brokerage first made a name for itself doing straightforward land sales, typically open fields ripe for masterplanned development
With land getting tighter in many markets, the company has expanded into the sale of parcels in developed areas or land with buildings on it that can be torn down and rebuilt as homes, apartments or condominiums.
The firm also sells to developers planning mixed-use developments that could include homes and shops.
