The planned sale of a recently renovated Irvine office that holds the new headquarters of motocross apparel company Fox Head Inc. should provide a good test of whether investor interest in creative work space has made its way to Orange County.
16752 Armstrong Ave., an 82,645-square-foot office about a block from The District shopping center, went up for sale this month, according to brokerage data.
An asking price for the building, which brokers from CBRE Group Inc.’s Newport Beach and El Segundo offices are marketing for sale, hasn’t been disclosed.
Real estate sources estimate it could command a sale price of about $400 a square foot, or about $33 million.
A sale price in that range would mark a significant markup for the property, which last traded hands for a reported $7.5 million near the start of 2012.
A venture between Shubin Nadal Associates LLC of Newport Beach and Hartford, Conn.-based Penwood Real Estate Investment Management LLC currently owns the building.
The new owners at the time of the last sale signed Fox Head, an apparel designer and sponsor of motocross and other action sports, to a lease of the entire building in a 15-year deal.
Last year saw the property get an estimated $10 million makeover in preparation for Fox Head’s arrival, a change that transformed the previously vacant, nondescript industrial building into one of the more eye-catching offices in Irvine.
Fox Head, whose annual revenue is estimated at $200 million, moved its headquarters from Morgan Hill in Santa Clara County to Irvine following the building’s renovation.
Its office space features an open-air layout intended to cater to Fox Head’s design and sales operations, as well as to executive staff.
The building’s lobby holds a Fox Head store for employees and friends, stocked with branded racing gear, apparel, accessories and shoes. Bleachers at one end of the office space are for staff town-hall-style meetings. There’s a staff library, showroom space for buyers, and open meeting and kitchen space on the ground floor.
Things get even more nontraditional outside the building, where there’s a BMX track and fire pit, eventually to be joined by a skate park, according to CBRE marketing materials for the property.
The office is “only one of a few stand-alone creative office buildings in Orange County,” according to CBRE.
Creative-Space Trend
Creative-office space—which emphasizes open-air work space, fewer individual offices, lots of collaborative space, and a number of employee-friendly perks, like Wi-Fi—is increasingly common in tech and media-heavy markets like Silicon Valley, San Francisco and West L.A.
The trend has had limited traction in OC, mostly confined to a few design, architecture and development companies.
CBRE officials say they believe that’s likely to change.
“We’re starting to see some of that (creative space) seep down” to Orange County, said Jim Kruse, CBRE senior managing director.
Property owners “are trying to see if there is a reconfiguration of their buildings that might (attract) this type of creative user,” Kruse said during a recent presentation sponsored by CBRE and law firm Allen Matkins Leck Gamble Mallory & Natsis LLP.
“The ones that can (do that) are going to be the winning ownerships,” he said. “Tenants are just working differently—the Starbucks is just as important to an office user as the office space itself.”
Dog-Friendly LA Redesign
The trend toward creative-office space hasn’t been lost on local developers, who have embraced it for properties they own outside of OC.
Irvine-based Bixby Land Co. said earlier this month that it plans to spend $10 million on a vacant, five-story office it just bought in El Segundo, with plans to transform it into a building resembling a resort or boutique hotel.
The 112,695-square-foot property is on El Segundo Boulevard about two miles from LAX Airport and previously was occupied by defense contractor Raytheon.
The building, once renovated, is expected to appeal to “progressive-minded firms that want an alternative workplace,” according to Bixby, which bought the office for undisclosed terms in a venture with Hartford, Conn.-based Cornerstone Real Estate Advisers LLC.
“Today’s users want a dynamic workplace that is the antithesis of their parent’s generation,” said Bixby Chief Executive Bill Halford. “This is definitely not your father’s office.”
The building’s lobby will feature lounge seating and custom music, and there will be outdoor gathering areas for tenants at the property, which will be dog-friendly and provide beach cruiser bicycles for tenants’ use.
Culver City-based Shubin + Donaldson Architects is handling the design of the El Segundo property.
