Valeant Pharmaceuticals International is trying to sublease all or part of its Aliso Viejo headquarters just two years after the slimmed down drug maker moved its operations there from Costa Mesa.
The company’s four-story, 109,948-square-foot building at One Enterprise, which overlooks the San Joaquin Hills (73) Toll Road, recently was put up for sublease.
Valeant is asking monthly rents of $2.35 per square foot for space at the building, where it signed a 10-year lease in late 2006.
The entire building is being listed as available for sublease. Whether that means Valeant is looking to consolidate operations within one part of the building, or would look to move elsewhere for a smaller location, hasn’t been disclosed.
The company employs about 300 people at its headquarters, down from an estimated 500 employees about two years ago.
A move to cut back on office expenses isn’t unexpected. Valeant’s been on a big cost cutting and restructuring bid this year under new Chief Executive J. Michael Pearson, a turnaround specialist from McKinsey & Co. who joined early this year.
Pearson said earlier this month that Valeant wants to complete restructuring its operations and start 2009 “with a simplified, growing company.”
In October, Valeant landed a deal with GlaxoSmithKline PLC worth as much as $825 million to develop retigabine, an epilepsy drug.
Valeant has been slimming down other parts of its operations. Earlier this year, the company sold off its European and Latin American businesses. Its sale of its European division to Swedish drug maker Meda AB netted nearly $400 million.
Former chief executive Timothy Tyson, who was replaced by Pearson in February, started restructuring the company when he took the helm in 2005.
In late 2006, Tyson oversaw the move from the company’s longtime headquarters in Costa Mesa and subsequent $38 million sale of the iconic office on Hyland Avenue. The move marked a break from the past for the company, formerly known as ICN Pharmaceuticals Inc.
This summer, Pearson said a sublease of the Aliso Viejo building and relocation to a smaller space was a possibility.
Right now, “all options are open,” said Greg Ficke, a broker with the Irvine office of Cushman & Wakefield Inc., which is marketing the building for Valeant.
Valeant’s headquarters is the latest Aliso Viejo building to see big space give-backs by retrenching tenants. Others in the area looking to sublease big chunks of space include the local headquarters of Miami-based Lennar Corp. and Seattle-based insurance company Safeco Corp., now part of Liberty Mutual Holding Co.
Sublease Space
Sublease space represents about 15% of the total office space that’s on the market in Orange County, according to CB Richard Ellis Group Inc. The 3.2 million square feet of sublease space available here is up 8% from last quarter.
Rents for sublease space usually run 10% to 30% below direct rents, according to brokers. Valeant has not disclosed how much it is paying in rent for its building, which is owned by San Francisco-based RREEF Funds LLC, a unit of Germany’s Deutsche Bank AG.
