Allergan PLC plans to vacate and sell three offices at its sprawling Irvine campus near John Wayne Airport, in the latest sign of retrenchment for the local operations of the drug-making giant.
The Madison, N.J.-based company, which late last year employed an estimated 1,400 people in Orange County and is the area’s largest drugmaker, said last week that it intends to list three buildings it owns on Michelson Drive for sale in the next few weeks.
The buildings total about 90,000 square feet. Allergan bought them in a series of deals between 2006 and 2008, according to records of real estate market tracker CoStar Group Inc. The prices that the company paid for the one- and two-story offices, at 2400, 2402 and 2500 Michelson weren’t disclosed.
Employees working at the buildings will be relocated to other buildings on Allergan’s main campus that are scheduled for a creative-office makeover in the coming months, officials said.
A small office that the company owns on Von Karman Avenue will also be vacated but not sold, the company said.
“Selling the Michelson buildings will reduce our operating expenses and enable us to invest in the other renovations,” company officials said in a letter sent to employees last week.
Allergan currently owns every property on the block that holds its Irvine campus, except for the 2600 Michelson office tower, where it’s leased a few floors of space in the past.
It’s estimated to have paid in excess of $70 million in the past dozen years to acquire a number of properties surrounding its main campus, in deals that added nearly 270,000 square feet of space to local operations.
The buys allowed Allergan to add more local workers to a base that at one time approached 3,000 and provided the maker of Botox, Restasis and other drugs a buffer against residential and commercial development taking place in the vicinity.
The past several years the company’s need for space in Irvine dropped significantly following a series of job cuts, first in response to a hostile takeover attempt by Valeant Pharmaceuticals International, and later following its 2015 acquisition by Actavis PLC—a $66 billion merger, which saw Actavis keep the Allergan name but the company’s U.S. base move to New Jersey.
State records show that Allergan will have cut another 421 positions in Irvine by mid-March as part of a larger, companywide layoff.
Company documents sent to employees last week noted Allergan had “nearly 2,000” colleagues in Irvine; that figure likely includes a large number of contractors who are not full-time employees of the company.
Last year, Allergan put up for sale a pair of offices it owns on the other side of its campus totaling about 68,500 square feet. A deal for those properties is expected to close in the next few months.
The local office of CBRE Group Inc. has the listing, and is expected to market the three Michelson properties for sale, as well.
Back to School
The sell-offs come as Allergan plans a major renovation of its core campus, which was last updated some 15 years ago.
Plans on the books call for “creating a more modern and engaging work environment,” the company told employees.
Creative-office upgrades planned for the campus will include open floor plans and fewer traditional offices, the use of more natural light, and a new outdoor courtyard where a parking lot is now.
The goal is to make the Irvine campus “look, feel and operate like a college campus,” the company said.
Trammell Crow Co.’s two-building Boardwalk office development is across the street from Allergan’s campus, and its outdoor amenities “inspired our desire to create the new courtyard space,” the company said.
A new training center is also planned, in addition to a “bigger and better gym” and improved conference rooms.
Allergan’s main campus is fenced off from the public; the three offices to go up for sale aren’t.
Having all workers in the fenced-off portion of the campus will “create a more cohesive community,” the company told employees last week.
The renovations could begin in April and wrap up in about a year, assuming the permitting process with the city goes smoothly, the company said.
