A company specializing in executive suites has leased 24,259 square feet at 8105 Irvine Center Drive, a high-rise in the Irvine Spectrum formerly home to Lake Forest’s Western Digital Corp.
Real Estate Management Corp. took unused space off the hands of Icon Clinical Research, a unit of Ireland’s Icon PLC. The Irvine Company owns the tower.
The executive suite company is set to occupy the ninth floor of the 15-story building in November. The lease is for five years and totals about $3.5 million, according to Studley Inc., which handled both sides of the deal.
Real Estate Management is set to prep the space for use by other companies. Everything from computers to a receptionist can be provided, according to Ron McElroy, president of Real Estate Management.
“Basically, someone can walk in with a briefcase and go to work,” he said of the space.
McElroy said he’s been trying to get into the high-rise for three years.
“It’s just the best location, best building in South County,” he said.
The tower should be 100% occupied after the company moves in, according to Studley.
David Gordon, an executive managing director in Studley’s Los Angeles office, and Corey Davidson, assistant director, represented Real Estate Management along with Scott Granger in Irvine.
Shane Wilder and Stu Betty, both managing directors in Studley’s Irvine office, represented Icon.
Icon, which helps drug companies prepare for clinical trials, is consolidating some operations out of state and keeping a small office in the county, according to sources.
A Little Extra
A private investor out of Gardena recently paid $9.3 million for a 118,250-square-foot industrial building in Anaheim.
The building at 5235 E. Hunter St. is leased mostly to Pretium Packaging LLC, a St. Louis-based container maker.
The buyer plans to refurbish 10,000 square feet of second-story office space and look for tenants, according to the investor’s broker, Chris Migliori, executive vice president of GVA DAUM.
Migliori said the renovation is set to take place while the rest of the building is occupied.
“This is more back office,” he said about the extra space. “It’s for call centers, mortgage companies and guys that just need additional office space but whose manufacturing or distribution is working fine.”
Jim Oliver, a principal of Lee & Associates Commercial Real Estate Services Inc., represented seller Safstrom Family Trust.
Some Wall Street analysts and investors are losing faith in Orange County’s publicly traded homebuilders and mortgage lenders.
The problem: exposure to over-heated California. There are other issues.
J.P. Morgan & Chase Co. last month downgraded shares of Irvine-based Standard Pacific Corp. That followed three separate analysts downgrading Irvine-based subprime lender New Century Financial Corp. in September and August.
Also in August, JMP Securities downgraded Newport Beach’s Impac Mortgage Holdings Inc. for the second time this year.
The downgrading of Standard Pacific to “underweight” from “neutral” was particularly notable, since J.P. Morgan simultaneously upgraded its ratings on a couple of others.
It upgraded Los Angeles-based KB Home to “neutral” from “underweight” and upgraded Denver’s M.D.C. Holdings Inc. to “overweight” from “underweight.” It downgraded Dallas’ Centex Corp. to “neutral” from “overweight.”
Like Standard Pacific, KB Home is based in Southern California. KB is more diversified, though, building in 12 states: Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Nevada, New Mexico, North Carolina, South Carolina and Texas.
Stephen Scarborough, chief executive of Standard Pacific, has worked to diversify his company into more states during the past few years. It now builds in seven states: California, Texas, Arizona, Colorado, Florida and the Carolinas.
But has he diversified enough?
The question applies to most of the mortgage companies based here.
New Century makes loans in many states, but is heavily exposed to California, where there has been dramatic home price appreciation since 2000.
The issue is coming to a head as the Federal Reserve Bank continues to raise short-term rates.
Last month the Fed bumped a key short-term rate to 3.75%, despite speculation it might halt rate hikes in response to Hurricane Katrina.
Last month New Century, for the second time this year, said its profits for the year would fall short of expectations.
During a conference call, company executives said foreign investors still are buying mortgage-backed securities, which is the ultimate market for their subprime loans.
But New Century said that its profits are being squeezed and it will raise rates it charges borrowers.
Wall Street investment banks, which underwrite the securities and maintain a small stake in them, are concerned about exposure to interest-only loans, which are very popular in the Golden State, according to New Century.
