The local office of Dallas-based landlord Lincoln Property Co., which has quickly built one of Orange County’s largest office portfolios outside Irvine Co. the past few years, is embracing the coworking revolution.
“Tenants and occupiers are gravitating toward coworking—it’s the way office space usage is going,” said Parke Miller, executive vice president at Lincoln, which oversees roughly 6.1 million square feet of office space in OC from its regional office in Costa Mesa.
“I respect it, and the strategic benefits it brings for both tenants and landlords.”
Lincoln is hedging its bets, though, through partnerships with an assortment of shared-space companies at its properties, including recently inked deals in Tustin, Costa Mesa, and now, Newport Beach.
The company disclosed last week that New York-based WeWork, the country’s largest and fastest-growing shared operator of flexible work spaces with short-term leases, would be taking a large chunk of space at the two-building Redstone Plaza complex it owns along MacArthur Boulevard in Newport Beach, about a mile from John Wayne Airport.
WeWork signed a 51,714-square-foot lease at 4041 MacArthur Blvd. It will be moving in later this year.
It’s the first announced lease for WeWork—which now occupies or plans to occupy nearly 400,000 square feet of space in OC—at a Lincoln-run property in the area.
Cluster Strategy
It’s also the second notable lease for WeWork in Newport Beach in less than a month.
The Business Journal reported last month that the coworking operator was planning to open a 51,500-square-foot office at the 100 Bayview Circle complex in the same city.
The Bayview Circle is near the intersection of Jamboree Road and South Bristol Street, less than a mile from Redstone Plaza.
The two offices are WeWork’s first announced locations in the city.
“WeWork has been extremely active on the leasing and occupancy front in Orange County,” Miller told the Business Journal.
“This new location relates to Bayview because it is strategic for WeWork to cluster spaces together so they can offer inventory of high-quality space in a tight radius.”
The two locations will be WeWork’s seventh and eighth in Orange County. A majority of that space has been added the past two years. They are now OC’s largest provider of shared space by square footage.
“We see a lot of growth opportunity and potential for WeWork in Orange County and it will continue to be a focus of ours,” Kley Sippel, general manager for WeWork’s Southern California operations, said earlier this year.
Other OC locations for the company include four in Irvine—both in the Spectrum and the airport area—and two in Costa Mesa’s Arts District.
Upgrades for New Addition
Lincoln bought the Redstone Plaza last August for about $45 million as part of an eight-building portfolio sale. The commercial real estate developer and investor partnered with Angelo Gordon to buy the low- and mid-rise offices, all located in Newport Beach and Irvine, for a total of $160 million.
The buildings were sold by EQ Office, a unit of New York-based private equity giant Blackstone Group LP that has been shedding part of its local portfolio in recent months (see story, page 1).
A $4 million renovation project is planned for the five-story properties at the complex—now called Redstone—which is on the corner of MacArthur Boulevard and Dove Street.
The upgrades aim to “activate indoor and outdoor spaces, add amenities and create value for our tenants,” said Miller.
This includes converting a long-vacant bank teller station into a Lost Bean coffee shop, and adding an outdoor lawn area.
Another switch for the property: Lincoln moved around some existing tenants at Redstone to come up with two contiguous floors at the property, to lease to the new coworking tenant.
Upgrades at Redstone should wrap by the beginning of next year, according to Miller.
Busy Year, Coworking Partners
Redstone is one of many ongoing area projects for Lincoln Property, whose local office is behind Tustin’s recently opened Flight office development along with several other office acquisitions and renovations.
One of the first tenants to sign on at Flight, the first phase of which opened in March, was Work Well Win, a Greenwich, Conn.-based coworking firm taking up about 25,000 square feet.
In addition to Work Well Win and WeWork, Lincoln is working with a local coworking operator called FLDWRK.
The firm, which also has a Fullerton location, is moving into a 72,500-square-foot office building in Costa Mesa from its current location at 270 Baker St. in Santa Ana.
The multitenant complex along Paularino Avenue now is home to the Dallas-based real estate firm’s local office; it is seeing a $12 million revamp.
The renovation will update the façade of the four buildings, renovate a currently unused central courtyard, and add an event space and coffee shop. The rebranded complex next to the Costa Mesa (55) Freeway will be called Culture Yard.
“Part of our leasing process is seeing where each coworking tenant would work best,” Miller said. “It was a no brainer to lease to FLDWRK at Culture Yard, though it may not have fit as best at Redstone,” Miller said.
