Orange County saw an uptick in grand-opening ceremonies last year, but commercial developers are waiting for many of the area’s biggest projects to finish and in some cases to start.
The county’s largest office, industrial, retail and hotel developers finished a little more than 600,000 square feet of projects here last year, according to this week’s Business Journal list.
The good news: That’s well above the 251,000 square feet of finished projects reported in the prior year’s list, the least new development ever reported in the annual listing.
The bad news: It’s the fourth year in a row in which less than 1 million square feet of new commercial buildings wrapped up here.
But there’s some light at the end of the tunnel. The pipeline of projects is slowly ramping up after the downturn, as developments begin to get off the ground.
Next year’s list will include two large office projects moving toward completion: the 380,000-square-foot high-rise office tower in Newport Center being built by Irvine Company for investment manager Pacific Investment Management Co., as well as the 470,000-square-foot Hyundai America Motor Inc. headquarters under way in Fountain Valley.
Those two deals, along with other big projects in the works, will push completed development past the 1 million square-foot mark next year—a good sign of an improving local economy and a growing appetite for commercial development.
But area developers still have a way to go before reaching marks seen during other boom times.
For example, work ended on nearly 7.8 million square feet of projects ac-ross the county at the peak of
the most recent commercial real estate boom in 2007.
The 18 companies on this week’s list have a little less than 6 million square feet of projects under construction or slated to break ground by year-end.
A total of 20 developers reported completing projects here in 2007 larger than 40,000 square feet. This year, only five companies earned that distinction.
The top eight companies on the list are ranked by projects completed over the past year, while the remaining 10 companies have projects in excess of 100,000 square feet that are under way or expected to break ground by year-end.
Data used to compile the list are from individual submissions, Costar Group Inc. and Business Journal records.
The list includes a handful of construction companies that handled work for specific projects, such as Newport Beach’s recently opened, 117,000-square-foot City Hall. The local office of Pasadena-based construction company C.W. Driver, No. 2 on the list, oversaw the estimated $110 million project.
Western Realco Tops
Vacancy rates for Orange County’s industrial base are now approaching historical lows, so warehouse and distribution facility developers are expected to be in demand for the next few years.
Brokerages estimate that 15 sites in OC or just over the L.A. County line are in escrow, just sold or in the early stages of industrial development. Those sites are believed to total nearly 300 acres.
Newport Beach-based Western Realco was among the first area industrial developers to get off the ground on their projects and as a result grabbed the No. 1 spot on this week’s list.
New developments built by the company include an 83,000-square-foot project at Saturn Business Park in Brea that’s the largest speculative, ground-up industrial building the county has seen in several years.
Western Realco also recently finished renovating a 110,000-square-foot building on Myford Road in Tustin that it’s offering for sale or lease.
The company broke ground on more than 1.4 million square feet of industrial projects in Southern California in the past couple of years, according to Jeremy Mape, who heads acquisitions for Western Realco.
No. 3 on this week’s list is Irvine-based R.D. Olson Development, California’s most active hotel developer for the past few years.
The company started seven hotel projects over the past two years alone, including hotels in Tustin, San Juan Capistrano and the Irvine Spectrum. Those projects should keep the developer near the top of the list for at least the next few years.
R.D. Olson’s Tustin Pacific Center, a two-hotel, $60 million project going up on the Costa Mesa (55) Freeway, is the first new hotel in Tustin in more than 15 years. It should open by July, according to the company.
The company also is planning a project in Huntington Beach and is in the running to build a hotel on the old Newport Beach City Hall site.
Redevelopment projects in general haven’t been included on the developers list, but this week’s edition includes a few exceptions. They include Newport Beach-based Shubin Nadal Associates LLC, which oversaw the redesign of an Irvine warehouse for the new headquarters of clothing company Fox Head Inc.
That 82,645-square-foot project is the largest example of creative-office space built in the area of late. Shubin Nadal is No. 4 on this week’s list.
A similar overhaul is taking place about a mile from the Fox Head office on a new facility for Pacific Dental Services, No. 16 on the list.
The 147,000-square-foot project includes nearly 22,000 square feet of for-lease creative-office space, in addition to Pacific Dental’s new Irvine offices, which it owns. An affiliate of the dental company is said to be handling the project’s development.
Download the 2013 OC’s LARGEST COMMERCIAL DEVELOPERS list (pdf)
