Resources Connection Inc. (Nasdaq: RGP), a global consulting firm whose clients have included 88% of the Fortune 100, is nearing a deal to sell its headquarters to the city of Irvine.
The city last week approved a plan to enter into a purchase and sale agreement for 17101 Armstrong, a two-story, 57,300-square-foot office about 1.4 miles from Irvine’s Civic Center.
Resources Connection, which also operates under the Resources Global Professionals (RGP) name, has owned the Armstrong building since 2005, when it paid $9.8 million for the office, according to records from real estate market tracker CoStar Group Inc.
Irvine is expected to pay $13.5 million, or nearly $236 per square foot, for the office, according to city records. The deal could close this summer, assuming due-diligence assessment and subsequent negotiations are successful, it said.
The building would be used for an expansion of the city’s operations, and would allow for a reconfiguration of Irvine’s existing, 191,000-square-foot Civic Center at the intersection of Alton Parkway and Harvard Avenue “to address both city council expansion and Police Department related space needs,” it said.
Sole Owned Building
RGP, which was founded in 1996, grew out of Deloitte with a decentralized, branch office-based model to help finance executives with operational needs and special projects created by workforce gaps.
“The trends in today’s marketplace favor flexibility and agility as businesses confront transformation pressures, severe skilled labor shortages and speed-to-market challenges,” it says.
The company counts a market value of about $428 million, and ranks No. 39 on this week’s list of largest public companies based in Orange County. Its shares are off some 20% from a year ago.
Last week, the company announced plans to acquire Reference Point LLC, a N.Y.-based strategy, management, and technology consulting firm serving the financial services sector. Terms of the deal were not immediately disclosed.
The financial services industry “has been a top three sector for us since inception,” and the deal is expected to accelerate growth in that area, RGP Chief Executive Kate Duchene said in a statement.
RGP counts and facilities and operations in over 35 cities in 14 countries around the world, according to its latest annual report.
Outside of the Irvine location, none of its other facilities are owned, it said.
RGP’s corporate headquarters “provide centralized administrative, marketing, finance, human resources, information technology, legal and real estate support,” in addition to its Orange County practice, according to its last annual report.
The company in January reported revenue of $163.1 million for its fiscal second quarter, down from $200.4 million for the year-ago period. It will report its third-quarter earnings on April 3.
RGP, which reports employing about 200 locally, hasn’t disclosed its plans for a new headquarters following the sale.
“We have had expressions of interest in the [Armstrong] property and given our evolving needs in the post-pandemic environment, we decided to explore and take advantage of those expressions of interest,” a company spokesperson told the Business Journal last week.
The office was put on the market for sale last year, according to marketing materials. The local office of CBRE Group Inc. has the listing for the property, which has been marketed as a potential corporate headquarters for an owner-user.
2nd Largest City
Irvine officials say the extra space at the Armstrong building is much needed for OC’s fastest-growing city.
“For more than a decade, the city has been exploring various options to expand the Civic Center, given the way that municipal operations have expanded concurrent with growth patterns during the past 20+ years,” a city filing pertaining to the proposed sale noted.
When the existing Civic Center was first built in 1989, the population of Irvine stood around 110,000. The city is now home to more than 318,000 residents. It surpassed Santa Ana to become OC’s second-largest city by population a couple years ago.
In addition to providing more services to Irvine residents, extra space is needed for the city to accommodate a planned expansion of Irvine’s city council to seven members, from five, it said.
An expanded police department is also envisioned with the addition of the Armstrong building, which is near the intersection Alton Parkway and Red Hill Avenue.
Tustin Blockbuster
The Armstrong office deal, if completed at around $236 per square foot, wouldn’t be the most expensive local government office buy in the immediate area of late.
In 2022, the County of Orange paid $91 million for a flex-office building in Tustin, located about a mile and a half away from the Armstrong building.
That 120,000-square-foot building, at 1382 Bell Ave., sold for a sky-high $758 per square foot. Larger offices in the area have rarely traded for over $400 a square foot, especially post-pandemic.
The county’s Sheriff-Coroner’s Technology Division uses the Tustin building.
