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Tuesday, Jul 16, 2024

Irvine Co. Pivot: Life Science to Multifamily

Irvine Co. has revamped plans for a 19-acre vacant parcel at its 185-acre UCI Research Park office campus, with a project that mirrors other development efforts it currently has in the city.

The site—last year envisioned as a potential 532,000-square-foot life science office campus dubbed Academy Point—is now slated to become a 1,200-unit apartment complex, as the Newport Beach-based developer looks to build housing near Irvine’s workforce hubs.

“From a master planning perspective, UCI Research Park is an ideal location for new housing, [being] just steps from thousands of high-tech jobs and a top-ranked research university,” Irvine Co. Senior VP Jeff Davis said.

The project would be the first multifamily development at the office campus.

Irvine Co. is both the largest apartment owner and office owner in the state, with some 65,000 rental units and 50 million square feet of offices. A majority of Irvine Co.’s properties are in OC.

Electric Units

Officials say the parcel’s pivot reflects the strength of UCI Research Park’s existing tenant base, which houses 75 companies in its 36 buildings.

Notable companies in the 2.2 million-square-foot office park include chipmaker Skyworks Solutions Inc. (Nasdaq: SWKS) and fintech Acorns Grow, each of which has its headquarters at the office park, as well as national firms like device making firm Medtronic, networking giant Cisco Systems and the U.S. operations of networking firm Boldyn Networks.

The Irvine Co. also houses several of its own internal divisions at the campus.

The project is expected to be reviewed by Irvine City Council in early 2025. The first few units may be ready for move in by 2027, according to officials.

The low-rise multifamily complex will be one of the first in Irvine to have solar panels.

Irvine Co. also aims to make the project’s apartment homes all-electric.

The site, near the intersection of MacArthur Boulevard and University Drive, is also walking distance from the San Diego Creek Trail and a 60-acre nature preserve.

Nixed Plans

Before construction can begin on the apartment community, Irvine Co. must update the site’s zoning, which only allows medical and research uses, not residential.

The entitlement process is anticipated to take about 14 months, officials say.

Irvine Co.’s prior plans of a life science office campus at the UCI Research Park site, announced late last year, aimed to boost OC’s stature in the biotechnology and healthcare centers against nearby markets like San Diego.

The nixed plans included four four-story buildings with lab-ready space geared for medical, healthcare, and biotechnology tenants. It would have been the largest project of its type in the county.

Targeting Workforce Hubs

The move marks the latest example of Irvine Co.’s efforts to boost housing near OC’s job centers, specifically in the Spectrum area of Irvine, where the company has delivered several million square feet of offices over the past few years.

The company in March partnered with the city on a framework plan that includes six multifamily projects, which in total will deliver over 4,500 apartments in job centers.

The initiative aims to help Irvine reach its state mandated homebuilding goal of 23,600 units by 2029 and provide nearby housing for residents working near employment hubs.

The largest of the planned developments is a 1,456-unit complex at a vacant lot on Irvine Co.’s Discovery Park campus, a nearly 2 million-square-foot office park near the intersection of Sand Canyon Avenue and Laguna Canyon Road next to the Santa Ana (5) Freeway.
Similar to UCI Research Park, Irvine Co. previously planned to use the site for offices.

Apartment Switches

Irvine Co.’s recent switch-up for UCI Research Park also reflects the challenges facing the broader office market, and simultaneously the booming multifamily market.

Valuations for OC office buildings that have sold in the past year, in particular office towers, have fallen substantially due to slow return-to-work trends. Brokers note, however, that the worst may be over for OC’s office buildings and that the local market may be taking a turn for the better.

Even so, the falling values of office properties have prompted developers to switch gears to multifamily.

The UCI Research Park apartment community is one of multiple office-turned-multifamily developments planned for OC.

Other projects in the works include two by apartment investor Watermarke Properties.

The Corona-based company last July paid $36.3 million for 200 and 201 E. Sandpointe Ave., a pair of eight-story offices on 8.3 acres at the 46-acre Hutton Centre mixed-use complex in the South Coast Metro area of Santa Ana.

The deal marked a 31% discount to the prior sale of the offices in 2017, when investors paid $52.7 million for the buildings.

Watermarke plans to demolish 200 E. Sandpointe and replace it with housing.

The company’s acquisition came three months after Watermarke bought City Centre I, a 150,161-square-foot office building in Orange.

Watermarke plans to develop that 6.8-acre site into apartments.

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