Best Choice Products Inc., a Tustin-based home goods e-commerce firm, has inked a 52,000-square-foot deal for its new headquarters at the 100 Bayview office tower in Newport Beach.
The office at the Class A campus was once occupied by WeWork Inc., which filed for Chapter 11 bankruptcy last month. WeWork shuttered that office in 2019; it was then taken over by Industrious, another New York-based coworking company, which also struggled with demand for the shared space site.
Best Choice’s new office is roughly 1,000 square feet larger than its prior office in Tustin and will have a sign that faces the 73 Toll Road.
The 346,335-square-foot office campus, located near the San Diego (405) Freeway and the Costa Mesa (55) Freeway, is owned by Plano, Texas-based Granite Properties.
Campus Upgrade
Best Choice’s current lease at 15101 Red Hill Ave. in Tustin will expire at the end of January.
The company’s new office in Newport Beach is part of a Class A mixed-use complex and includes an on-site 250-room Marriott Hotel, fitness center and nearby or on-site retail amenities such as a café, hair salon and auto detailing shop.
The tenant’s current location in Tustin, at the Pointe Red Hill complex, by contrast, is a Class B office property.
The deal is one example of companies utilizing higher-end offices as a means to attract talent in a competitive labor market, sources tell the Business Journal.
Coworking Market
WeWork shed its office at 100 Bayview around the time the coworking operator lost its $47 billion valuation four years ago, after a failed IPO exposed the company’s struggle with reaching profitability.
Industrious then took over the spot for about two years, but did not find much success.
The company mostly used the space for enterprise office rooms, or suites for businesses of around 20 to 50 people, sources indicate.
Compared to smaller executive suites, which can fit up to 10 people, enterprise offices have seen low demand due to their high-density designs in the wake of the pandemic.
Industrious’ occupancy level at 100 Bayview hovered around 30% prior to closing, sources note.
Third-quarter vacancy levels for the Orange County office market was 13.4%, which is the same as the national average, according to Avison Young.
Sources expect the number of coworking locations to further consolidate, with an estimated footprint loss of 20% to 30%.
Other companies besides WeWork and Industrious that have a presence in OC include Regus and Premier Workspaces.
Premier Plans
Premier Workspaces has historically found success in taking over shared space outposts from troubled operators such as WeWork, which recently saw its OC footprint further shrink with the closure of its 75,000-square-foot location at Irvine’s Lakeshore Towers and the Boardwalk, which ran about 60,000 square feet.
At its height, WeWork’s collection of 10 open and soon-to-open locations in OC totaled close to 600,000 square feet, according to Cushman & Wakefield data. Today, its footprint is less than half that size.
In total, WeWork aims to cancel nearly 70 leases in the U.S. and Canada following its file for bankruptcy (for more, see the Nov. 20 print edition of the Business Journal).
Those locations have caught the eyes of Premier, which “sees this as a unique chance to expand its footprint,” the company said in a recent statement.
Premier, which says it has never had an unprofitable year in its 21-year history, has taken over 52 distressed locations from other coworking operators.
