Irvine Co., Orange County’s largest owner of offices, said it defied national trends with strong 2023 results.
The Newport Beach-based developer’s portfolio of offices, which totals some 54 million square feet of space across about 590 buildings, with a majority of that space in OC, said its buildings were 91% leased last year.
That runs counter to the trends of office occupancy in the U.S. experiencing significant declines since the onset of the pandemic.
Occupancy for offices in major U.S. cities currently runs about 10% lower than what Irvine Co. is seeing at its buildings, according to data from Moody’s Analytics.
The developer said it leased 9.5 million square feet to over 900 companies last year.
Along with OC, it has offices in Los Angeles, San Diego, Silicon Valley, Chicago and Manhattan.
“Companies are drawn to Irvine Co. for our premium workplaces, personalized service and industry-leading financial stability,” Office Division President Roger DeWames said in a statement.
“Our 2023 leasing activity highlights the continued flight to quality in the market and the ever-growing importance of choosing not only where your company works, but who your landlord is.”
Irvine Co. also attributes its success on the leasing side to the more than $650 million it invested in its offices for operating capital and tenant improvements, as well as a years-long focus on flexible workspaces, a product type which is now grabbing more tenant interest.
“We’re constantly improving our products and services—whether it’s reinvesting in our network of indoor and outdoor meeting and event spaces or simplifying the leasing process and providing the ultimate in flexibility through our Flex+ workspace program,” DeWames told the Business Journal.
Allied Universal HQ
Among Irvine Co.’s notable new local tenants are Allied Universal, the world’s largest private security firm, which moved its headquarters from Santa Ana to a 53,360-square-foot office at Market Place Center in Irvine last year.
The security giant’s new headquarters marked a 52% increase in size from its old 35,185-square-foot hub along the Costa Mesa (55) Freeway.
Allied worked with Irvine Co. “to create a customized workspaces that bolsters our company culture” and accommodates Allied’s anticipated headcount growth, Allied CEO Steve Jones said in a statement.
Irvine Co., which is the biggest office owner in the state with some 50 million square feet of workspace in California, executed several notable new leases in OC last year.
The biggest local office lease was signed by device maker Axonics Inc. (Nasdaq: AXNX) for a 119,115-square-foot building at Irvine Co.-owned Sand Canyon Business Center, an office complex at the intersection of Sand Canyon Boulevard and Irvine Center Drive.
That deal—the largest for offices in OC since 2021—also included part of a second building, which brought the urologic-focused device maker company’s total leased footprint to 145,500 square feet.
Irvine-based Axonics, valued at $3.4 billion as of last week, says it remains on track to move to the new space in April this year, despite its recently struck deal to sell itself to Boston Scientific.
Bullish on Office
Irvine Co. remains bullish on office leasing activity despite the sector’s historically high vacancies due to slow return to work.
The company is especially focused on SoCal, whose residents were the focus of a recent Irvine Co. survey that found that office professionals had favorable attitudes towards in-person work.
According to the survey, 3 in 4 SoCal office workers believe that in-person work is essential to career growth.
Additionally, 9 out of 10 said that working in-office connects them better with their company’s culture.
The survey’s sample size totaled 500; its multigenerational participant base included Gen Z, millennials, Gen X and baby boomers. Irvine Co. conducted the survey in collaboration with Wakefield Research.