Expect to see a surge in commercial real estate development activity near the southern edge of the former El Toro Marine Base in Irvine, following the decision of Broadcom Corp. to relocate its headquarters to the Great Park Neighborhoods site.
Broadcom this month confirmed its long-expected deal to buy about 72 acres at the site, which will hold a new headquarters for the chipmaker.
The technology company, which has a market value of nearly $25 billion, is already Orange County’s largest office tenant. But it is paving the way for a major expansion in space with the new campus.
Broadcom plans to initially build a 1.1-million-square-foot campus, but it could expand to up to 2 million square feet at the site if needed.
The company currently leases about 920,000 square feet at its 7-year-old campus at University Research Park in Irvine, about nine miles from the Great Park site.
As many as eight buildings could be built on the campus, which will be near the intersection of the San Diego (405) and Santa Ana (I-5) freeways. The largest office is expected to be about 455,000 square feet.
The campus is being designed by San Francisco-based architecture firm Gensler and will be built by DPR Construction of Redwood City. Both companies have offices in Newport Beach.
First of Several
The new Broadcom campus will be the largest commercial development in years for Orange County, and it is expected to usher in a wave of construction in the vicinity, according to Emile Haddad, chief executive of Aliso Viejo-based FivePoint Communities, which runs Great Park Neighborhoods.
This “is the first of several announcements,” Haddad said.
There’s always been a lot of focus on housing at the former Marine base, “but now people will be focused on companies and jobs,” Haddad said.
Broadcom has about 2,500 employees in Irvine. The company’s new campus could, in theory, hold as many as 7,000 employees, according to city filings.
The Broadcom campus represents nearly 40% of the commercial development slated for Great Park Neighborhoods.
The 3,700-acre Great Park Neighborhoods site, which largely surrounds the 1,300-acre Orange County Great Park, is entitled to hold about 9,500 homes, in addition to nearly 5 million square feet of commercial and retail development.
“We still have many more acres that could hold” offices, Haddad said.
A good portion of the additional commercial and retail development also is expected to come on the southern edge of the property near the Irvine train station.
Landing Broadcom “really starts activity for the project, at that end (of the former base),” Haddad said. “It activates a lot of opportunities near the train station,” in terms of shops, restaurants and other amenities.
Haddad said he’s not interested in replicating the design of University Research Park with the commercial development slated for Great Park Neighborhoods.
“We’ll have more mixed uses, rather than making it a pure research campus,” he said.
University Research Park is about 2.2 million square feet and close to being fully occupied, although the loss of Broadcom would leave a large hole to fill in a few years if the space remains in its current configuration and no new tenants are lined up between now and then.
The 185-acre site is a venture between Broadcom’s current landlord, Newport Beach-based Irvine Company, and the University of California-Irvine.
The university could also play a part in the new development moving ahead at the Great Park Neighborhoods, said Haddad, chair of the UCI Foundation, which promotes the university’s interests.
Haddad said he has spoken to new UC Irvine chancellor Howard Gillman “about creating a much bigger partnership between the university and the community.”
Construction Next Year
Broadcom said it expects the land acquisition to close in the first quarter of 2015; financial terms of the land purchase have not been disclosed.
Its initial 10-year lease at University Research Park—which was for about 685,000 square feet, well below what it now occupies—was valued at about $183 million. “Owning land and building a campus provides Broadcom with favorable economics and flexibility for the long-term,” Scott McGregor, the company’s chief executive and president, said in a statement.
Broadcom expects construction to begin in the first half of 2015, with the first phase of development ready for initial occupancy in 2017.
Landing Broadcom “is a big validation for the project,” said Haddad, who praised the city for its part in keeping the chipmaker in Irvine.
“They did a lot of work” to make the deal happen, Haddad said. “Cities are fighting for companies like Broadcom.”
