Orange County’s rapidly growing base of co-working spaces geared to smaller businesses is expanding to another prominent location at a nearly ready office campus in the Irvine Spectrum.
Newport Beach-based Irvine Co. said it will add Spaces, a creative-workspace provider that’s been making a big push in Southern California, to its Quad at Discovery Business Center development.
Spaces will lease 41,000 square feet at 530 Technology Drive, one of four buildings under way at the Quad on Sand Canyon Avenue next to the Santa Ana (5) Freeway. It will get the building’s top signage.
The Quad’s mix of three- and four-story buildings total 370,000 square feet. The speculative development about a mile from the Spectrum shopping center broke ground a year ago and will open this summer.
The complex is already about two-thirds preleased, according to Irvine Co.
Spaces is the second-largest tenant that’s been announced at the project. Vyaire Medical Inc., a Chicago-based firm whose local operations were previously run as CareFusion, will occupy 185,000 square feet in two other buildings at the midrise campus.
Kore1, an Irvine-based provider of staffing solutions, also just announced it will move to the Quad from its current location in the Spectrum, occupying about 6,000 square feet.
3rd OC Spot
The Quad will be the third and largest OC location Spaces has announced. Its OC portfolio includes about 102,000 square feet of high-end space, including the Quad deal, as well as locations at two recently renovated office projects.
The company, which offers ready-to-use desks, technology and office suites for individuals and small companies that need flexible office leases, is also opening a 27,000-square-foot location at The Met campus in Costa Mesa this summer. The smallest offices in Costa Mesa begin at $269 per month, private ones starting at $569, according to the company’s website.
Spaces also has a 34,000-square-foot lease at the Intersect campus location near John Wayne Airport. The two-story location, opened last year, has 281 dedicated desks, a 3,800-square-foot business club and two meeting rooms, according to the company’s website.
The location is nearly fully occupied, according to Hines Senior Managing Director Ray Lawler, one of the owners of the four-building Intersect office campus, which has been undergoing a $25 million overhaul over the past 18 months.
The largest tenant at the Spaces Intersect location employs about 20 people on site, while a bulk of the companies renting there have fewer than five employees.
Spaces is owned by Luxembourg-based office landlord IWG, which also owns Regus, another shared space provider with nearly 20 OC locations. Spaces offers more cutting-edge architecture and on-site amenities, as well as higher rents than typical Regus locations.
The company’s been aggressively expanding in the region. Spaces said this month that it plans to open five co-working locations in Los Angeles County this summer.
“The Quad was the ideal location for Spaces to continue expanding our footprint in California,” said IWG Vice President Michael Berretta in a statement.
“The site allows us to seamlessly create an environment that encourages collaboration and innovation, while providing easy access to an inspiring outdoor space that will help companies thrive.”
The Quad features modern architecture that mirrors Irvine Co.’s two new Spectrum-area towers, and will feature tenant amenities such as a fitness center, group fitness classes, abundant outdoor meeting space, and a bike-share program.
Spaces’ growth mirrors that of New York-based WeWork Inc., which now has two OC locations totaling about 65,000 square feet, one at Irvine Co.’s 200 Spectrum Center tower, the other at Irvine Co.’s Pacific Arts Plaza campus in Costa Mesa.
Too Fast?
With more than 200,000 square feet of leases signed at some of the area’s high-end office buildings this year, co-working operators have provided landlords like Irvine Co. and Hines a big source of new business, on top of paying top rents and signing long-term master leases.
The expansion carries its share of risk, though. A $702 million junk bond offering from WeWork last month got national attention and sold quickly, but the prospectus tied to the offering shed light on the company’s rapid cash burn and big rent obligations it’s taken on over the next 10 to 20 years, about $18 billion, according to Bloomberg. WeWork’s operating loss last year was $933 million, according to the bond offering.
One local shared-space provider has already folded recently in Orange County. Newport Beach-based Real Office Centers gave up its space at multiple area locations last year due to financial issues. Irvine-based Premier Business Centers took over much of the space, allowing existing ROC tenants to remain in place.
