CBRE Group Inc. has long stood as Orange County’s largest commercial real estate brokerage, as well as the area’s biggest property manager of commercial buildings.
Now the Los Angeles-based firm, which has a large West Coast operations base in Newport Beach, and a second location in Orange, has a new goal: becoming a go-to partner for area office landlords looking to add coworking space to their buildings.
The company recently set up a new shared-space company called Hana, which is aiming to muscle into the fast-growing line of real estate business that offers tenants large and small flexible work space with short-term leases.
Its first location, announced earlier this year, was in Dallas.
Hana’s first West Coast location and second in the U.S. will be in Irvine. The firm recently inked a lease with LBA Realty to take nearly 60,000 square feet at the Irvine-based landlord’s Park Place mixed-use complex near John Wayne Airport.
It’s among the largest local office leases in the past six months, and the site at 3349 Michelson—set to open later this year—is one of the largest coworking locations announced to date in OC.
Hana Chief Executive Andrew Kupiec said more’s in store, locally. He hopes to have multiple facilities in 25 core markets in a three- to four-year period.
OC’s one of those key markets, Kupiec said last week.
“We’re absolutely targeting Orange County in general and Irvine [specifically],” he said.
Skin in the Game
Hana offers a different operating model than those used by large national coworking players with growing OC bases of locations like WeWork, Industrious or Spaces.
CBRE and the landlords it partners with are expected to share in the expense of building out and running the space. The two groups will also share the profit from operating those spaces.
Kupiec said the Hana model is a welcome addition to traditional landlords concerned that firms like WeWork are diminishing their longstanding relationships with tenants. WeWork now has a nationwide portfolio reportedly topping 10 million square feet, and in less than three years has added more than 300,000 square feet in OC.
For large national tenants that are increasingly using coworking sites to house employees at remote locations, Hana also thinks its business model will be more appealing than the less informal spaces of its competitors.
Among offerings will be its “Hana Team” space, which will provide “private office suites that meet the needs of high-growth organizations and large corporate users of office space,” according to a company statement.
These sites can be configured for a larger-sized tenant in a matter of weeks, Kupiec said.
Pricing for the Irvine space hasn’t been announced yet.
“It will be competitive to the other premium [coworking] products,” he said.
CBRE’s Hana business isn’t related to HanaHaus, a separate coworking company with ties to SAP SE that’s setting up one of its first spots in Newport Beach (see story, page 3).
Landlord on Board
LBA, which runs and owns the 2-million-square-foot Park Place in a venture with Principal Real Estate and Allianz, said it’s keen on the new platform.
“We’re eager to bring Hana’s new flexible space solution to Park Place,” LBA Principal Brad Neglia said in a statement. “Backed by CBRE, Hana’s deep expertise in delivering optimal solutions for owners and occupiers, coupled with their unique approach to design and hospitality, makes them an ideal partner.”
More deals with LBA are possible, according to Kupiec.
LBA ranks No. 13 on this week’s property managers list, with about 5.2 million square feet of commercial property managed in OC (see list, page 36).
Following a 24,000-square-foot Industrious site, Hana will be the second coworking location added in the past year to the sprawling Park Place campus near the intersection of Jamboree Road and the San Diego (405) Freeway.
CBRE’s deep ties to the area’s base of landlords are expected to give it an edge in finding top locations for additional Hana spots, and its relationships with the country’s largest office tenants are also expected to help fill its spots going forward.
The brokerage reported about $5.8 billion in lease and sales transaction work out of its two OC offices last year, tops among area firms (see list, page 28).
CBRE isn’t the first commercial brokerage to enter the coworking fray. JLL, No. 4 on this week’s list of commercial real estate brokerages, and No. 12 Savills have dabbled with their own flex space investments, according to national reports.
