LBA Realty, the owner of much of the Park Place mixed-used campus in Irvine, is looking to build a companion project on a nearby parcel of land that would feature offices, a movie theater, a hotel, retail and other features.
The Irvine-based real estate owner and investor recently filed early-stage plans with the city of Irvine to build a mixed-use project at 2722 Michelson Drive, a roughly 9.4-acre site at the intersection of Jamboree Road and Michelson that now holds an industrial building.
The property previously served as a manufacturing and office site for St. John Knits International Inc. and now is used by apparel maker Obey Clothing. It’s kitty-corner at Michelson and Jamboree from LBA’s 105-acre Park Place campus.
LBA bought the 2722 Michelson building last year for an undisclosed price. The site previously traded hands in 2011 for about $24 million, according to CoStar records.
Project
The developer has filed plans with the city to raze the existing building at 2722 Michelson and replace it with a 10-building mixed-use campus of more than 400,000 square feet.
A pair of five-story offices totaling about 230,000 square feet would be the largest buildings at the project, according to city filings.
A seven-story hotel totaling 150 rooms and about 94,000 square feet has also been proposed, along with a movie theater running close to 50,000 square feet.
The rest of project would consist of smaller restaurants and retail buildings, according to city filings. Irvine-based architecture firm LPA Inc. is heading up design of the project, according to those filings.
Tenants for the buildings or a hotel brand have not been disclosed.
LBA Realty officials declined to comment on plans for the development.
Groundbreaking doesn’t appear to be likely in the near term. City planning officials estimate that it will take about nine months before the project makes its way before Irvine’s planning commission and city council.
Irvine-based Obey Clothing has a lease at the existing 2722 Michelson building that runs through the end of 2016, according to brokers. The company makes urban-style clothes and accessories with designs licensed from graphic artist Shepard Fairey.
The proposed LBA development site is in one of the more prominent locations in the area around John Wayne Airport, an area that’s expected to see its share of new construction in the next year.
The intersection of Jamboree and Michelson—just off the San Diego (I-405) Freeway about a mile from JWA—is the busiest intersection in Irvine in terms of car traffic, according to city records.
On the opposite end of the block where the new LBA project is located—south on Jamboree—Dallas-based Trammell Crow Co. is planning its own 545,000-square-foot office project, called Boardwalk.
That speculative development, featuring a pair of nine-story buildings connected on alternating floors with indoor bridges and outdoor walkways, should begin work early next year, Trammell Crow officials have said.
LBA has plenty of its own development and leasing experience in the immediate vicinity.
It took over ownership of a bulk of the low- and midrise portion of Park Place—virtually everything at the campus except a pair of condo towers and the Michelson office tower—from Maguire Properties in a series of transactions in 2009 and 2010.
The investor has since undertaken a major renovation and expansion of the 2.5-million-square-foot campus, reportedly spending more than $40 million to upgrade the property’s low-rise office space and shopping center, among other changes.
The offices on the campus are now nearly full, with larger tenants including Western Digital Corp., St. Joseph Health and Caltrans.
A flagship LA Fitness gym opened at the campus in 2013, and last year Newport Beach-based Irvine Company opened a 990-unit apartment complex at the eastern end of the campus.
A second apartment project headed up by Irvine-based Sares-Regis Group is now in the early stages of construction at Park Place, along with a new AC Hotels by Marriott being built by Woodbine Development Corp. of Dallas.
Minority Stake
LBA completed the sale of a minority stake of its holdings at Park Place this year, freeing up plenty of cash for new investments and developments, according to brokerage data.
Principal Real Estate Investors, a Des Moines, Iowa-based institutional investor, paid nearly $370 million for a 45% interest in LBA’s office and retail holdings at Park Place, which total nearly 2 million square feet, according to CoStar records.
That deal was completed at a 5% capitalization rate and implies a value of more than $800 million for the Park Place campus, according to CoStar.
