COMMERCIAL
Two weeks ago, I wrote a cover story on the state of Orange County’s slumping office market, which saw continued low levels of leasing and occupancy in the second quarter.
Data used in that story,provided by a number of local brokerages that represent both tenants and landlords in leases,put the amount of available office space at about 20% at the end of the second quarter, compared to 13% a year ago.
Some new data from a pure tenant brokerage puts the amount of empty OC office space at an even higher level, especially for the best office space in the county.
Class A office space in the county now is seeing availability rates,which include empty space and space available for sublease,at 25%, according to the Irvine office of Studley Inc. That’s close to the levels seen in mid-2002, at the depths of the last recession, a report by the brokerage said.
In South County, the availability rate for the best office space now is close to 33%. The amount of vacant, newly built space is similar to what was seen in Silicon Valley and parts of Southern California in 2002 and 2003.
That’s one reason monthly asking rents for class A offices in OC now stand at about $2.73 per square foot, down 2.3% for the quarter, and a drop of 8.1% from a year ago, the report said.
“Orange County has been flooded with space from two sources, mistimed new construction and sublet supply,” the Studley report said.
There’s more than 2.4 million square feet of new office space in OC being marketed for lease. For more than 300,000 square feet of that new space, landlords have dropped their monthly asking rates by more than $1 per square foot a month from what they originally were asking.
Tenants seeking large blocks of high-end space can drive good deals, beyond just rents, according to Studley. For tenants looking to lease more than 50,000 square feet, typical concessions include six months of no rent, tenant improvement allowances of $40 per square foot and a moving allowance of $2 per square foot.
For smaller tenants looking at class A space, four months of no rent, tenant improvement allowances of $35 per square foot and moving allowances of $2 per square foot now are the norm.
Fisker Moves
Irvine-based Fisker Automotive Inc. is moving its headquarters across town.
The company, a maker of environmentally friendly luxury sports cars, signed a 29,074-square-foot office lease at 19 Corporate Park in Irvine. The three-year lease is for the entire two-story building, which is next to the Tustin Legacy development.
Terms of the lease weren’t disclosed.
Rich Pincott and Peter Andrich of CB Richard Ellis Group Inc.’s Newport Beach office represented the landlord, Farrell Richard C. Trust, a private investor. Todd Martens of Cushman and Wakefield Inc.’s Irvine office represented the tenant.
Fisker Automotive is a venture of Newport Beach-based luxury sports car company Fisker Coachbuild LLC and Irvine-based Quantum Fuel Systems Technologies Worldwide Inc.
The company’s looking to offer its upscale hybrid cars in late 2009, for an estimated $80,000.
Imperial Opening
La Habra’s Imperial Promenade shopping center is opening its doors.
George Argyros’ Arnel Capital Partners LLC of Costa Mesa and Irvine’s Hopkins Real Estate Group headed up the project, which replaced an old K-Mart building with a 215,000-square-foot shopping center along Imperial Highway and Idaho Street.
The redevelopment project, estimated at $45 million, has been in the works since 2005. It’s the largest real estate development undertaken by Argyros since he returned from his stint as ambassador to Spain in 2004.
The center’s Target and Circuit City anchor stores opened in late July; a grand opening for the entire center is set for Aug. 14.
Avanath Correction
In my June 16 cover story on Irvine-based apartment investor Avanath Capital Partners LLC, I got the wrong Neff when listing some of the individual investors of the company.
Avanath’s investment partners include Doug Neff, president and managing partner of IHP Capital Partners, a big housing investor that’s based in Irvine.
The story incorrectly referenced Don Neff, president of La Jolla Pacific Ltd., a consulting firm that also is based in Irvine.
