Transwestern Commercial Services plans to start construction in August on a 230,000-square-foot office tower in Irvine.
The high-rise would make Transwestern the first developer to build a major speculative office building in Orange County in three years.
Other office buildings have been built with a major tenant lined up ahead of construction.
Officials with Houston-based Transwestern said they want to build their tower before a handful of other developers with similar plans finish work.
“It’s better to be the lead dog, than behind,” said William Lawrence, senior vice president of development with Transwestern.
Transwestern, which has offices in Irvine, is developing the 10-story tower at 18100 Von Karman Ave. for the site’s land owners: affiliate Transwestern Investment Co. of Chicago and Cigna Realty Investors, a unit of Philadelphia-based Cigna Corp.
The tower is expected to cost around $70 million to build.
“We have ordered steel,” Lawrence said.
The company is in talks with potential tenants, he said. David Girty in Transwestern’s Irvine office is marketing the building to prospective tenants. George Garfield, president of the Western region for Transwestern, also is handling the project from Los Angeles.
Transwestern long has had the site entitled for more space. It plans to apply for a building permit soon.
The developer is set to raze a glass and concrete building that previously housed Remick’s restaurant.
The proposed high-rise would complete the 900,000-square-foot Irvine Center Towers campus. Four black 11-story towers and a Prego restaurant are on the site at Von Karman and Michelson Drive.
Irvine Center is 95% full and is the headquarters of business software maker Epicor Software Corp. and New Century Financial Corp., one of the nation’s largest subprime lenders. New York’s Pfizer Inc. and other companies have space there.
“We love this location,” Transwestern’s Garfield said.
Transwestern is losing one big tenant at its campus.
Last week New Century outlined plans to move its headquarters a stone’s throw down Michelson to a planned 20-story office tower in Park Place in 2007.
The company is consolidating from several locations around the county. It leases about 60,000 square feet at Transwestern’s office park. New Century’s lease expires in 2007.
New Century signed a lease for 190,000 square feet with Los Angeles-based Maguire Properties Inc., which owns Park Place at the corner of Michelson and Jamboree Road.
Maguire is expected to start construction on the tower later this year and finish in 2007.
New Century announced earlier this year it had signed another lease with Maguire for 179,000 square feet of space at Park Place.
Transwestern and Maguire Properties are among a handful of developers going forward with office towers. A kind of mini boom in high-rise construction appears in the works (see related coverage in the Commercial Development special report, page 19).
Last week another pair of developers announced plans for a 12-story high-rise in Irvine. Houston-based Hines and Crescent Real Estate Esquities Co. of Fort Worth, Texas, said they bought a 1.2-acre site in Irvine.
The partners plan to start construction on a 260,000-square-foot building early next year.
The Irvine Company is said to be planning twin 14-story towers in the Irvine Spectrum, according to city and real estate sources.
Developers are encouraged by the county’s overall office vacancy, which has dipped below 10% in recent months, according to local brokerages. Voit Commercial Brokerage LP pegs it at 9%.
Still, some brokers said rents must climb higher to justify the construction of towers.
Landlords on average are asking $2.60 per square foot per month for a class A building in the popular commercial hub near John Wayne Airport.
Officials with Transwestern said they have yet to decide how much rent they’ll charge at their planned building. They said rents likely will need to be more than $3 per square foot.
