Karma Automotive LLC will move the bulk of its local operations and establish a new direct sales center in a building in Irvine whose design is expected to echo the company’s cutting-edge technology.
The luxury hybrid-electric vehicle maker—which is named for its flagship Karma sedan and plans to debut a second model next month called Revero—recently signed a deal to move its local operations from Costa Mesa to a 262,000-square-foot creative-office property owned by Bixby Land Co. in the Irvine Spectrum area.
Karma plans to start moving into the new location this year. The deal, which is for the entire building, is the largest office lease reported in Orange County this year.
The property is a mix of office and flex space that previously held the North America headquarters of Kawasaki Motors Corp. U.S.A. Bixby bought it last year with the expectation of turning the now-vacant building into one of Orange County’s largest creative-office properties.
The site, at 9950 Jeronimo Road, is still in line to get a major makeover into creative space, but not as Bixby initially intended, according to Bill Halford, the Newport Beach-based commercial real estate developer and investor’s chief executive.
Karma Automotive is planning its own multimillion-dollar renovation of the property, which it will lease for about 10 years. The carmaker also has an option to purchase the building, according to Halford.
The local office of architecture firm Gensler is working with the automaker on the design of the building, which will include what the company calls its “Orange County Brand Experience Center.”
Plans for the company-owned direct-sales center were announced by Karma this month as part of a new distribution strategy, which also incorporates dealer agreements with eight U.S. and two Canadian dealers, including a second Southern California location in Pasadena.
The company’s Revero—a luxury plug-in hybrid car that’s being built at a new 556,000-square-foot facility in Moreno Valley—goes on sale next month for more than $100,000.
It’s the company’s first new vehicle since the Fisker Karma began deliveries to customers in 2011.
Karma hasn’t disclosed whether its headquarters will shift from Costa Mesa to Irvine as part of the new lease, although that appears likely.
“They had a desire to be in Irvine from a brand standpoint,” Halford said.
The Jeronimo Road location is about 2 miles from the 200 Spectrum Center office tower that will soon hold the North American operations of Japan-based Mazda Motor Corp., OC’s largest automaker by employee count and one of several major car companies with operations in the area.
New Start
The Irvine location marks the latest sign of growth for Karma Automotive, which previously operated under the name Fisker Automotive and Technology Group LLC and was based briefly in Irvine before moving to Anaheim.
The company was launched in 2007 by car designer Henrik Fisker, who left the carmaker in 2013. It leased close to 155,000 square feet in Anaheim at its peak.
Fisker filed for bankruptcy in 2013 after the company burned through more than $1 billion in venture capital funding and government loans.
Only about 2,000 Karmas were delivered by Fisker, due to a litany of problems with its batteries, software and other aspects of production.
Wanxiang Group Corp., one of the largest auto parts makers in China, paid about $149 million for the carmaker’s assets in a 2014 bankruptcy auction. It also owns Fisker’s former lithium ion battery maker, A123 Systems Inc., which it bought in 2013 for about $256 million.
Wanxiang is headed by Chinese entrepreneur Lu Guanqiu, whose fortune is estimated to top $5 billion, according to Forbes.
Karma now occupies about 80,000 square feet on Airway Avenue in Costa Mesa, according to property records. It employs more than 200 at its headquarters, the company said earlier this year.
Kawasaki Sale
Bixby is delivering the Jeronimo Road property to Karma largely “as-is” following Kawasaki’s departure, according to Halford.
Kawasaki, a distributor of ATVs, motorcycles and personal watercraft, sold its Irvine building and excess land to Bixby in April 2015 for about $44.2 million, and subsequently relocated its local offices to Foothill Ranch.
Halford said his company was planning a nearly $20 million redevelopment of the site—its largest property in OC—into a multitenant creative-office campus until Karma expressed interest in leasing the entire building a few months ago.
Gregg Haly and Jeff Carr with the Newport Beach office of CBRE Group Inc. represented Bixby in the lease transaction, and Karma Automotive was represented by Kevin Leonard and George Okita of California Commercial Real Estate Services in Newport Beach.
Chapman Buy
Bixby also recently decided to shed an excess 4.7-acre parcel next to the existing building, which is at the intersection of Jeronimo Road and Bake Parkway.
Chapman University, whose new Harry and Diane Rinker Health Science Campus is nearby, bought the land for $10.5 million, according to Bixby executives.
Specific plans for the site haven’t been disclosed. It likely will be used as excess parking for Chapman in the near term, Halford said.
The site is about half a mile from where the new campus for Broadcom Ltd. is being built.
The university opened its Irvine Spectrum health sciences campus in late 2014. It paid about $20 million for the two office buildings that hold its facilities, which combine for about 166,000 square feet.
The campus holds Chapman pharmacy, physical therapy and physician assistant graduate programs.
The school last month paid an additional $13.5 million for two nearby buildings, totaling some 64,000 square feet to augment the new campus.
CBRE’s Alex Hayden, Travis Boyd and Rick Sherburne represented Chapman University in the land purchase, while the brokerage’s Haly and Carr represented Bixby.
