Expect to see a lot more construction cranes join the skyline this year.
OC’s commercial real estate market could have its busiest year for new starts in a decade, thanks to a bevy of developments in a variety of product types across the county.
On the office front, nearly 2.5 million square feet worth of buildings could break ground in Irvine and Tustin during the year, along with potential big projects in Anaheim and Santa Ana. Most of the work will be for speculative buildings, putting pressure on developers to find tenants willing to pay top dollar for space.
The area’s tight industrial market also has a few projects in the works, most notably Western Realco’s planned redevelopment of the former Beckman Coulter campus in Fullerton, a multibuilding project that could approach 1 million square feet.
An active hotel development pipeline here should get busier next year, with a 14-story, 250-room flagship Marriott hotel being built by R.D. Olson in the Irvine Spectrum among the most notable new projects slated to break ground.
The Source, a shopping and entertainment center in Buena Park, is expected to join recently opened retail projects in Huntington Beach and San Clemente that are in the leasing phase.
New housing starts should also continue their brisk pace at the area’s biggest master developments, although builders will be keeping a close eye on the financial situation in Asia, one of OC’s biggest sources of homebuyers, particularly in Irvine.
Company to Watch Hines Interests LP
The strategic moves and leasing activity seen from Hines’ Irvine office, one of the area’s largest office landlords, should provide a good barometer of the health of OC’s office market in 2016, especially for new buildings and creative-office projects.
The company partnered with PIMCO this past August to snap up the airport area’s largest empty office campus, the four-building, 430,000-square-foot Quintana campus at the intersection of Main Street and Von Karman Avenue in Irvine.
The property is about to be redeveloped to include numerous creative-office features that are quickly becoming de rigueur in the market. Hines’ success next year in finding one or more large tenants for the space, now called Intersect, will be one of the biggest tests yet for creative-office developers in the area.
Hines also has a ground-up office development in the works on Von Karman but hasn’t been as aggressive as other area developers in pushing for an early 2016 groundbreaking. If its nine-story project begins to move ahead in earnest next year, it’ll be another sign of the area’s rising demand for new space.
Hines also has been one of OC’s most active buyers of local properties in the past few years. More deals from the Houston-based real estate giant would indicate that investors still have plenty of opportunities here.
Person to Watch Gary Jabara
Gary Jabara is ramping up for a year of massive growth for Mobilitie, a wireless infrastructure company he founded in 2005 that acts a lot like a traditional real estate landlord: It rents out space at its cell phone towers and other sites it owns to a variety of wireless tenants.
The Newport Beach-based company recently announced a $325 million fundraising deal to fuel growth, and it’s now in the midst of a massive hiring spree in OC and across the country, gearing up for what it is calling the “largest network deployment initiative in the U.S.”
Details on that deployment haven’t been disclosed. Industry chatter suggests that Mobilitie has a deal in the works with Overland Park, Kan.-based Sprint Corp. to roll out a countrywide upgrade of the wireless giant’s network, primarily through the use of small cell base station sites.
Jabara’s real-estate acumen should play a large part in the deal, as Mobilitie would “monetize the small cell network by leasing space to other carriers in addition to Sprint,” according to a recent report in RCR Wireless News.
If the Sprint deal moves ahead as reported, expect to see Mobilitie become a much bigger name nationally in both real estate and telecom circles.
