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Advantage’s Office Solution: Downsized, Low-Rise HQ

Those expecting a boost in the size and scope of the local operations for Advantage Solutions Inc. (Nasdaq: ADV) after the sales and marketing firm completed its long-awaited goal of going public late last year will have to wait a bit longer.

The Irvine-based firm, with a recent market cap of $3.8 billion and a local employee base estimated at several hundred people, disclosed in recent regulatory filings it would be moving its headquarters to a smaller office in the city.


Its new base will be in the Lakeview Business Center office complex in the Spectrum area of the city.


Advantage said it signed a five-year lease for 22,000 square feet at 15310 Barranca Parkway, a low-rise complex owned by Irvine Co.


Its current headquarters run about 48,000 square feet in the Irvine Towers high-rise office complex near John Wayne Airport. That lease, also with the Irvine Co., is set to expire in May.

 
“We’re excited about our move and have designed a next-generation workspace that will foster creativity, collaboration and innovation,” a spokesperson told the Business Journal in response to an inquiry about the move and the thinking behind a smaller office footprint.

Uncertain Office Market

Advantage is far from being alone among notable area businesses reconsidering their space needs as Orange County returns to a new post-pandemic normal.

 
Those decisions are bound to have a major shake-up on the area’s office market, which counted a vacancy rate around 12% and an availability rate close to 18% at the start of 2021, according to data from CBRE Group Inc.


Despite clear signs of optimism in the economy—OC business executives’ outlook has climbed to the highest level since the end of 2018, according to the latest data from economists at California State University, Fullerton—most brokerages are expecting an uptick in near-term vacancy rates and availability rates as some firms opt to sublease or vacate portions of their space.


Numerous companies, including fintech upstart Happy Money, healthcare software company NextGen Healthcare, tech firm BlackBerry Cylance and device maker Vyaire have listed large portions of their local office space for sublease in recent months, according to brokerage information.


Keep an eye on the region’s base of “shadow” availability, or space that is available but not currently advertised as being so, in 2021, according to data from tenant brokerage Savills. It’s likely to increase.

SPAC Move

Advantage, long one of OC’s largest private companies by revenue, went public last October through a reverse merger with Naples, Fla.-based blank check company Conyers Park II Acquisition Corp.

 
The deal was among the first for an area company using the increasingly popular SPAC, or special purpose acquisition, route. It came several years after the firm first looked to go public via a traditional IPO.


Despite the public listing, it wasn’t all smooth sailing last year for the marketing and sales company, which works with companies such as Walmart, Amazon, Target and Kroger providing services such as e-commerce, digital, analytics and merchandising. Its operations, which typically includes a large amount of in-person dealings at grocers and other retailers, felt the impact of the pandemic.


“2020 was a test for us all,” CEO Tanya Domier said in a statement on the release of the company’s full-year results.


The year was marked by a net loss of $161.7 million on revenue of $3.2 billion. Revenue was down 16.6% from the year-ago period as a result of declines in the company’s marketing division, while sales notched growth. Domier called the impacts of COVID “short-term headwinds” for parts of the business.

 
Much of that impact was felt on the in-store sampling the company does for brands, which came to a halt last March and April. However, that portion of its business has begun to reopen in markets where it is able to do so, the company said in a filing.

 
In the meantime, Advantage said it has seen growth in its experiential marketing services related to sampling on grocery pick-ups and virtual product demonstrations.


Advantage said in a filing with the Securities & Exchange Commission late last month it was ending leases or making amendments to existing real estate deals to cut costs in an effort to address impacts to the business caused from COVID.

 
That’s in conjunction with other cost-cutting moves Advantage said it has taken including furloughs, permanent layoffs, pay reductions, deferred compensation, cutting non-essential travel and, what it called, discretionary expenses.

 
The company said at the end of last year it had more than 80 offices, according to filings. 

Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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