Three financial institutions have committed to more than 300,000 square feet, combined, of office leases in Irvine. All three leases have bucked a local trend of tenants seeking smaller office spaces, generally smaller than 20,000 square feet.
Pacific Premier Bancorp renewed a 115,438-square-foot office lease at 17901 Von Karman Ave., its corporate headquarters, while JPMorgan Chase maintains 173,178 square feet of its office space at 3 and 5 Park Plaza in Irvine.
Wells Fargo renewed its 52,958 square feet of office space at 2030 Main St., also in Irvine.
The Pacific Premier and Wells Fargo leases were confirmed by CBRE, while Cushman & Wakefield reported the JPMorgan Chase lease.
Pacific Premier Bancorp Lease
The Irvine-based Pacific Premier is the largest tenant at 17901 Von Karman and occupies six floors at the 12-floor office tower.
Pacific Premier, beyond its Irvine headquarters, operates 16 administrative offices and 58 banking branches in Arizona, California, Colorado, Nebraska, Nevada, New Jersey, Texas and Washington state.
Pacific Premier Bancorp, which was founded in 1983 as Life Bank, ranks as the second largest bank by assets in Orange County, according to the Business Journal’s annual list.
The regional bank on Oct. 24 reported third quarter net income fell 22% to $36 million from the same period last year. It has $17.9 billion in total assets as of Sept. 30 and a market cap of $2.4 billion (Nasdaq: PPBI).
JPM Renews Irvine, Cuts Back in San Francisco
JPMorgan Chase renewed its Irvine lease during the third quarter, while planning to remove 244,000 square feet of space it leases at One Front Street in downtown San Francisco. That lease, according to CoStar data, expires in June 2025.
A majority of JPMorgan Chase’s lease in Irvine is at 3 Park Plaza, where the banking giant leases 160,524 square feet, per CoStar. The remaining space is at 5 Park Plaza. Both buildings are owned by The Irvine Co., with JPMorgan Chase signage perched at the top of 3 Park Plaza.
New York-based JPMorgan Chase, with about 294,000 employees and nearly $155 billion in revenue, occupies 46 million square feet of office space globally, per CoStar.
Wells Fargo Lease
The San Francisco-based banking giant, like Pacific Premier at 17901 Von Karman, is the largest tenant at 2030 Main St. in Irvine.
Wells Fargo renewed its Irvine office lease despite what Charles William Scharf, the banking giant’s president and chief executive officer, described as a “lumpy” market.
“In our commercial portfolios, losses continued to be driven by commercial real estate office properties, where we expect losses to remain lumpy,” Scharf said during Wells Fargo’s 2024 second quarter earnings call.
“Fundamentals in the institutional owned office real estate market continued to deteriorate as lower appraisals reflect the weak leasing market in many large metropolitan areas across the country.”
Wells Fargo, with its 238,000 employees and $82.6 billion in revenue, occupies 45 million square feet of office, globally, per CoStar. Most of its space – more than 25 million square feet across 3,741 locations – is leased.
OC Renewals Still Small
Recent office lease signings across Orange County, despite the renewals of JPMorgan Chase, Pacific Premier Bancorp and Wells Fargo, have been on the small size.
An analysis of Orange County’s office market by CoStar at the end of 2024’s third quarter found businesses in the region “don’t need as much space as they once did.”
“Office tenants are more frequently leasing smaller-sized office suites in the area, and just a few leases for over 50,000 square feet of office space have been signed this year, a slowdown from the more than 10 inked last year and an average of 20 signed annually in the past decade,” Jesse Gundersheim, a researcher with CoStar, said in his market analysis.
He added leasing activity for office space between 20,000 and 50,000 square feet has been slow this year, with 30 such deals signed this year. That’s down from the more than 50 such deals signed for both 2022 and 2023, according to Gundersheim.
He added year-to-date leasing volume for office spaces of 20,000 square feet or more only made up 19% of activity, a “historical low.”
JLL, meanwhile found leasing volume jumped 5% in 2024’s third quarter, compared to the previous three-month period, with lease renewals dominating the market.
Cushman & Wakefield, looking ahead in its 2024 third quarter report, said the Orange County office market would benefit from 168,137 square feet of space coming online at The Weave at OCVibe in Anaheim and a 108,942-square-foot building in Tustin that would be used as Advantech’s North American headquarters.
