The city of Tustin is looking to turn a 43-acre portion of its Tustin Legacy development into Orange County’s largest creative-office campus.
The city last week signed off on a plan to begin marketing land near the southwestern edge of Tustin Legacy—the 820-acre development going up on a portion of the city’s former Marine helicopter base—for sale to developers of creative offices, as well as to potential owner-users.
A total of 508,000 square feet of low- and midrise office space could be built on the 43 acres, according to city documents.
Projected prices for the land sales haven’t been disclosed. The project would be near the intersection of Barranca Parkway and a planned extension of Armstrong Avenue.
The smallest office buildings at the development—called Cornerstone at Tustin Legacy—would be 50,000 square feet, with some topping 100,000 square feet.
Construction work for the first offices could begin in about a year once roadwork, utility and other infrastructure work in the area are completed.
Selling It
Marketing of the project is expected to begin in earnest next month. Tustin City Council last week approved using brokers from the Newport Beach office of CBRE Group Inc. for the project.
Commencement of construction hinges on user activity, according to CBRE First Vice President Chris Bates, who has the listing for the land with colleagues Ted Snell and Eric Snell.
“We’re looking for build-to-suit opportunities first, but we’re already seeing interest from developers who have expressed possible interest in spec development or partial spec development, so we’re very optimistic that this project will move forward very quickly,” Bates said.
The city has indicated that any for-lease buildings at the project should have tenant commitments for 50% of the space before construction moves ahead.
First of Kind
The former military base is now seeing its first major slate of commercial development in years, with several hundred apartments being built by Newport Beach-based Irvine Company and St. Anton Partner LLC in Sacramento.
Homes by Irvine-based Standard Pacific Corp. are also planned for another 78 acres at the former base, and so is a retail center by Jacksonville, Fla.-based Regency Centers Corp. at the eastern edge of Tustin Legacy.
“This is the first office and R&D property to be brought to the market at Tustin Legacy,” said John Buchanan, deputy director of economic development for the city.
More traditional offices were initially envisioned for the land in prior iterations of the massive development, but those never moved ahead in the last recession and subsequent downturn in the local office market.
“The market wasn’t there before for office, (but) now we’re seeing that market come back,” Buchanan said last week during a city council hearing on the proposal. “It’s the perfect time for that sort of thing.”
“The fact that an office development site of this magnitude is moving forward is the clearest indication that momentum at Tustin Legacy is building strongly,” Tustin Mayor Al Murray said.
“We are committed to working with potential office users and developers to ensure this one-of-a-kind property is a true cornerstone in our city’s future,” Murray said.
‘Underserved Niche’
Creative-office development—which emphasizes open-air work settings with fewer individual offices and lots of collaborative space—is the city’s preferred type of development for the land.
“It’s an underserved market niche in Orange County,” Buchanan said.
A bulk of the creative-office space in OC to date is a result of redevelopment at existing buildings instead of ground-up construction.
Two of the more prominent examples of creative-office space in OC are a few blocks from the Tustin development site: the Armstrong Avenue headquarters of motocross apparel company Fox Head Inc., and the headquarters of dental-practice manager Pacific Dental Services Inc. on Red Hill Avenue.
Technology, healthcare, financial services and apparel companies are all expected to be potential users of the proposed Tustin buildings, which would be within walking distance of the District at Tustin Legacy shopping center and a new multiacre park that’s planned to be next to the office site.
“It’s extremely rare to find an office development site of this size in an infill location in close proximity to amenities and a major airport,” CBRE’s Ted Snell said.
