Apple Inc. has struck a deal to increase its Irvine real estate presence in what appears to be a move by the world’s most valuable tech company to further establish its chipmaker manufacturing foothold in Orange County.
On the heels of signing a deal last year to occupy the entirety of a 115,290-square-foot building developed as part of the final phase of the Spectrum Terrace office campus, Apple (Nasdaq: AAPL) has signed a deal to take an additional 55,667 square feet of space at the Irvine Co.-owned project.
The new lease is for the first two floors of 17800 Laguna Canyon Road, a four-story building also running some 115,000 square feet. Apple’s deal is expected to begin in December, property records indicate.
The deal marks another notable leasing win for Irvine Co., whose chairman, Donald Bren, ranks No. 1 on this week’s OC’s Wealthiest list, with a valuation estimated by the Business Journal at $18 billion (see list, page 14).
Irvine Co. is Orange County’s largest office landlord with a local portfolio totaling nearly 27 million square feet.
Despite a rough market for office owners across the country, sources tell the Business Journal that Irvine Co.’s office portfolio, running about 590 buildings, still counts occupancy rates in excess of 90%, with its newest projects seeing strong user demand.
Apple is currently advertising dozens of jobs on its website for hardware engineers and researchers, including a RFIC division, or radio frequency integrated circuit, which is a chip commonly used in cellphones to transmit and receive radio waves. Apple is also reportedly hiring for engineers to develop semiconductors for Bluetooth and Wi-Fi connectivity.
Apple has long purchased such chips from Irvine-based Skyworks Solutions Inc. (Nasdaq: SWKS), Irvine-founded Broadcom Inc. (Nasdaq: AVGO) and San Diego-based Qualcomm Inc. (Nasdaq: QCOM).
Apple’s new wireless unit has been ramping up for more than a year, with some industry watchers speculating the company would bring chipmaking in-house to lessen its dependence on suppliers such as Skyworks and Broadcom.
Industry analysts, however, have suggested to the Business Journal that Apple could be using the division to better inspect and test what they are buying from the local chip suppliers.
Apple has historically represented a large portion of business for Skyworks, with the company accounting for 58% of the chipmaker’s business in fiscal 2022. Its chips are used in Apple’s smartphones, tablets, computers, watches and other devices.
Skyworks, valued around $18 billion and OC’s fourth-most valuable public company, has been looking to scale back that dependence in recent years.
Apple’s lease is the second-largest new office deal inked during the second quarter, trailing Axonics Inc.’s (Nasdaq: AXNX) nearly 145,500-square-foot deal in April to relocate its headquarters.
The medical device maker signed a deal to occupy a full building and part of a second at the Sand Canyon Business Center, an Irvine Co.-owned office complex at the intersection of Sand Canyon Boulevard and Irvine Center Drive.
The buildings, a few blocks from Irvine Valley College, will serve as the nearly $3 billion-valued firm’s new headquarters starting next year.
The Axonics lease marked the largest local office deal since early 2021, when Anduril Industries leased the entirety of The Press in Costa Mesa, which will total some 640,000 square feet at buildout.