The new owner of Emulex Corp. has put the networking equipment maker’s Costa Mesa headquarters campus up for sale, paving the way for local operations to be eventually relocated to Irvine, where it has a $37 billion acquisition of Broadcom Corp. pending.
Avago Technologies Ltd., a Singapore-based networking company with U.S. operations centered in San Jose, listed the Emulex campus at 3333 S. Susan St. at an undisclosed price last week.
Market observers say the property—which includes about 180,000 square feet of space spread over three buildings and 3.2 acres of adjacent land—will fetch a price in excess of $50 million.
A deal is expected to close this summer.
Two of the buildings at the campus, totaling about 84,000 square feet, would be vacant upon completion of the deal, according to marketing materials from the Newport Beach office of CBRE Group Inc., whose brokers have the listing for the property.
The third building at the campus, which is about 94,000 square feet, would be leased back to Emulex under a 10-year deal at a monthly rate of $1.25 per square foot.
The tenant would have the ability to terminate that lease at any point between
the second and fourth year of the leaseback, according to CBRE’s marketing materials.
The timeline for the potential lease termination would largely fall in line with the expected opening of the new Broadcom campus that is now in the early stages of development in Irvine near the Orange County Great Park.
That Irvine campus, which is expected to open by late 2017 or early 2018, should run about 1.1 million square feet.
Chipmaker Broadcom announced on May 28 that it would be acquired by Avago, which plans to combine operations as Broadcom Ltd. The blockbuster deal, described as the largest ever combination between chip makers, is set to close by early 2016.
Avago completed the $660 million acquisition of Emulex in early May. The deal was first announced in February.
A move to the Irvine campus would bring Broadcom and Emulex together under decidedly different circumstances than once imagined.
Emulex rebuffed a $912 million takeover offer by Broadcom in 2009.
Avago has cut 49 jobs in the Costa Mesa offices of the former Emulex operations since taking over.
Emulex was Orange County’s 32nd largest public company through April, employing about 325 locally.
Change in Neighborhood
A sale of the Susan Street property would be the latest in a string of real estate deals believed to be on tap for South Coast Metro commercial buildings within a few blocks of Emulex’ offices, which are just north of the San Diego (405) Freeway near Costa Mesa’s Ikea shopping center.
In January, a subsidiary of Chicago-based Tribune Media Co. announced that it was seeking a development partner for a former Los Angeles Times office and printing plant it owns at 1375 Sunflower Ave. in Costa Mesa.
A selection of a development partner could be completed within the next month, according to real estate sources.
The Tribune’s 21-acre site, across the street from the 14.3-acre Emulex property, could be redeveloped into apartments or another type of mixed-use property, depending on future city land use decisions.
An allowance of residential or mixed uses for the area could increase the value of the 3.2 acres of developable land at the Emulex site, which now is zoned to allow about 65,000 square feet of commercial space.
Vans
Also expected to close this month: 1588 South Coast Drive, an empty, 180,000-square-foot office building about half a mile from the Emulex campus.
An affiliate of apparel company Vans Inc. is under contract to buy the black granite-clad building, which faces the San Diego (405) Freeway and is next to the South Coast Collection retail center.
The building is trading hands for about $52.3 million, and the deal will close by the end of June, according to regulatory filings by Irvine-based Banc of California Inc., which is selling the building.
Vans, the skate shoe and apparel division of Greensboro, N.C.-based VF Corp., is expected to move its local offices from Cypress to the Costa Mesa building.
