Equity Office Management LLC’s take on the creative office trend—and its embrace of new varieties of coworking options for office tenants—is being shown off at its largest property in Costa Mesa, a five-building collection of offices that sit alongside the San Diego (405) Freeway next to Bristol Street.
The Chicago-based investor, also known as EQ Office, is combining two adjacent Costa Mesa office complexes it owns next to the city’s Arts District into Canvas, a repositioning that will upgrade virtually all aspects of the nearly 551,000-square-foot property.
Expect to see a bevy of new amenities and a new coworking spot, not to mention a new flexible workspace product offering from EQ, according to the company, one of the country’s larger office landlords.
The two neighboring projects, previously called South Coast Corporate Center and South Coast Executive Center, were snapped up by EQ Office in separate transactions in 2013 and 2015, respectively.
The deals totaled $102.8 million, and valued the properties at about $187 per square foot.
The office investor, a unit of New York-based private equity giant Blackstone Group LP, started renovation work in July; it expects to deliver the project in phases from November to January.
“Our industry has changed dramatically, and as a landlord and owner, we have to do things differently now,” said Brendan McCracken, senior vice president of leasing at EQ Office.
Citrus Grove, Yoga Garden
Sweeping changes at the campus include renovated lobbies in all five buildings, investments in offices and suites, upgraded infrastructure, new artwork, and of course, amenity offerings.
This includes a gathering area designed around a citrus grove, a new coffee shop, a 2,800-square-foot fitness facility, conference centers, and outdoor workspaces.
McCracken declined to offer specifics on the project’s cost, but called it “a major investment for the city of Costa Mesa.”
“We want to generate an environment that feels authentic, has purpose and contributes to the greater good of the area,” McCracken said.
It’s one of several notable office redo’s in the immediate area of Costa Mesa’s Arts District.
McCarthy Cook & Co.’s The Met, on the opposite side of the (405) Freeway, underwent a similar transformation over the past few years, and The Offices at South Coast Plaza completely revamped its 3420 Bristol building at the intersection of Sunflower Avenue and Bristol Street earlier this year.
The city has served as inspiration for the Canvas project, with new food halls, boutique retailers and other unique area amenities in the Sobeca District providing a backdrop for the city’s growing population of younger residents.
“The city is home to Orange County’s largest pool of millennials,” McCracken said. He pointed to a study that suggested millennials are expected to make up 75% of the global workforce by 2025.
EQ has partnered with more than a dozen artists to create different installations throughout Canvas, from a 100-foot mural fronting Bristol Street designed by Fresno artist Aaron De La Cruz, to paintings in lobbies, to sculptures positioned in communal spaces.
That’s where the name of the project stems from, with the complex serving as “a blank canvas for companies to come in and make it their own.”
Newmark Knight Frank has been tapped to help with leasing.
Culture is New Capital
The transformed complex, now called Canvas North and Canvas South, is designed to attract young talent.
This was the primary catalyst for the project, centered on a shift in the commercial real estate industry that favored culture and creativity over just physical assets.
“Culture is the new capital today,” McCracken said. “One of our primary goals was to provide a working environment and experience that provides a competitive advantage, helping companies to attract top talent.”
EQ Office has already brought on a notable new tenant as part of the rebranding: New York coworking firm Industrious.
This will be the second local spot for the firm; it also has a spot at the Park Place campus in Irvine. Industrious acquired OC’s longest-running area provider of flexible workspace, TechSpace Inc., earlier this year, but those spots, including a location at 3420 Bristol, remain branded as TechSpace for now.
In addition to taking up about 22,500 square feet at Canvas, Industrious will serve as property manager of sorts, organizing events and activating the complex’s public spaces and amenities.
New Product
Similar to the area’s dominant landlord, Irvine Co., EQ Office is launching its own flexible office product, which will debut locally at Canvas.
Canvas Flex will offer speculative office suites, ranging from 1,000 to 4,000 square feet, on a short-term basis, with leases ranging from six months to three years.
“It’s a next step up from coworking, for companies that want a flexible lease to allow them to grow their business in their own space,” McCracken said.
If all goes well, EQ hopes to expand the offering to its other office holdings in the country.
The product is akin to Irvine Co.’s new Flex Workspace+ offering, news of which was first reported in the Business Journal last week. It offers shorter-than-normal lease terms at Irvine Co.’s large pool of office holdings across California and Chicago.
The two new services by the respective companies—both among the top landlords in the country—point to a growing demand for this type of product; not quite coworking, not quite traditional lease.
