Hyundai Motor America Inc. has found a short-term home for its North American operations during construction of a new headquarters facility at its base in Fountain Valley.
The automaker, part of South Korea’s Hyundai Kia Automotive Group, recently signed a deal to move its local operations to Costa Mesa’s Pacific Arts Plaza near South Coast Plaza.
The lease with Newport Beach-based Irvine Company is for about 150,000 square feet of office space at 3200 Park Center Drive. That takes about half of the building, which is the largest at Pacific Arts Plaza.
The space previously was used by mortgage company Ditech.com, which last year moved most of its remaining local operations to Pennsylvania.
Hyundai’s deal at Pacific Arts Plaza is one of the larger office leases seen in Orange County in several years and comes several months after Irvine Co.’s purchase of the complex.
Pacific Arts Plaza was about 50% full at the time of the deal. The Hyundai deal and several others have taken it to more than 80% full.
The lease is expected to run two or three years while Hyundai’s headquarters is being built in Fountain Valley, according to Don Yahn, an office broker with the Irvine office of Cushman & Wakefield Inc.
“It helps fill the trough,” Yahn said.
Hyundai also recently signed another lease for an additional 30,000 square feet for its credit and finance division at an Irvine office tower near John Wayne Airport.
The automaker’s Fountain Valley site, just off the San Diego (I-405) Freeway on Talbert Avenue, is about five miles away from the Costa Mesa office.
Construction of the headquarters on Hyundai’s 18-acre campus is slated to begin around July with the demolition of current offices.
The new building will be about 470,000 square feet, according to filings made with the city of Fountain Valley. That’s more than double the size of Hyundai’s current headquarters.
Renderings filed with the city indicate the building will be five stories.
The two-year project has an estimated price tag of about $150 million.
It will join a 380,000-square-foot office tower slated to be built in Newport Center for investment manager Pacific Investment Management Co. as the first major office projects to break ground in the county in several years.
Few Options
Hyundai had been on the lookout for temporary space near its current headquarters for close to a year, according to Yahn, who represented Hyundai in the recent deals.
“There were not a lot of options,” he said.
Hyundai’s current offices in Fountain Valley hold about 800 employees. The new space should allow for a good deal of local expansion with capacity for as many as 1,400.
Sales
• Headquarters: Fountain Valley
• Temporary headquarters: Costa Mesa
• Business: Auto sales
• 2010 sales: 538,228 vehicles
• Notable: Signed lease for 150,000 square feet of office space at Irvine Co.’s Pacific Arts Plaza.
The company has seen big increases in sales in the past year. It sold 538,228 vehicles in 2010, up 24% from 2009.
The trend has continued this year, as Hyundai sold 61,873 last month, up 32% from a year earlier.
The automaker hasn’t seen sales that high since a federal “cash for clunkers” incentive program helped Hyundai reach record levels in late 2009.
The deal for space for Hyundai Capital America at The Michelson—a 19-story office tower near John Wayne Airport that was built at the tail end of the latest real estate boom—increases its space there to about 100,000 square feet.
The Hyundai Capital name is on the building, and the division has the top four floors.
Hyundai Capital signed its initial lease at the building in 2008, and moved its finance arm to Irvine from Fountain Valley the following year.
Initially, the automaker took about 66,000 square feet of space, with the option to add another floor of space.
Hiring in Irvine
The extra space appears to be needed. Hyundai Capital has listings for about 40 open positions in Irvine, according to the company’s website. The division already employs about 500 people in OC and in Georgia.
The Michelson has about 532,000 square-feet of space and Hyundai Capital’s latest deal takes its occupancy to about 80%, according to the building’s owner, New York-based real estate investor Emmes Group of Companies.
Hyundai’s temporary move to Pacific Arts Plaza gives a shot in the arm to Irvine Co., which paid a reported $213 for the complex in its first foray into the business and arts district around South Coast Plaza.
Hyundai entered into talks with Irvine Co. for a potential short-term lease when the complex was in escrow, according to Yahn.
Irvine Co. hasn’t shied away from inking large, short-term leases in the past.
The Federal Deposit Insurance Corp. signed a 200,000-square-foot lease for Irvine Co.’s recently built 40 Pacifica building in the Spectrum a few years ago. That lease is scheduled to end early next year.
