Irvine Co. is heading into the new year with some closure.
The Newport Beach developer, Orange County’s largest office landlord with a local portfolio totaling nearly 27 million square feet, has completed the final phase of Spectrum Terrace, a 1 million-square-foot office campus that has attracted a slew of high-profile technology and other tenants since it kicked off construction in 2018.
Just two buildings—17700 Laguna Canyon Road and 17800 Laguna Canyon Road, built as part of the third and final phase—remain vacant, leaving the campus at nearly 80% occupied.
Sources indicate deals are in the works for those two buildings, though full-building deals are not expected.
Irvine Co. has had little problem in attracting large tenants to snap up entire buildings at the campus, located along the San Diego (405) Freeway, with nine offices spanning from 115,000 square feet to 184,000 square feet.
Large Tenants, Amenities
From investing a premium to buy the best glass available for the floor-to-ceiling windows in each office building, to planting over 2,000 trees and a bevy of amenities, Irvine Co. has touted the project as its best mid-rise office campus to date.
“Our goal was to design a workplace experience unlike any other in Southern California—from the landscaping to the thoughtfully planned collaborative spaces,” Jonathan Brinsden, president of Irvine Co.’s office division, told the Business Journal.
The campus includes a 5,800-square-foot conference and event center with indoor-outdoor connectivity; the 5,600-square-foot Terrace Kitchen + Bar, with rotating culinary stations and wine and craft beer; a 6,000-square-foot Kinetic fitness facility with classes and Peloton bikes; walking trails; and an Olympic-length, resort-style pool, delivered as part of the third phase.
Five of the buildings are fully spoken for by individual tenants, while two buildings count several tenants.
The smallest reported tenant is The Coca-Cola Co., located in a nearly 10,000-square-foot, ground-floor space at 17400 Laguna Canyon; and the largest is Alteryx Inc. (NYSE: AYX), which occupies the entirety of 17200 Laguna Canyon, a 184,000-square-foot building delivered in 2019 as part of the first phase, as well as part of a second building.
“Having an office space that employees really enjoy coming to has been a great tool for enticing teams to come together,” said Paul Short, managing partner of RSM US LLP, a tax and consulting firm with a nearly 30,000-square-foot office at 17400 Laguna Canyon.
Though the pandemic upended Orange County’s office market, keeping employees home and forcing employers to rethink space needs, it was largely a tale of two cities for developers and landlords.
New or upgraded Class A office product such as Spectrum Terrace, Flight at Tustin Legacy and Centerview at the Irvine Concourse continued to sign new deals amidst the market slowdown. Older spaces with fewer amenities have in general struggled with new leasing activity, as well as maintaining their existing tenant base.
Irvine Co. is focusing now on the next phases of the Innovation Office Park campus elsewhere in the Irvine Spectrum, now the company’s lone office development under construction locally.
Irvine Co. last year opened the first phase of the loft-style office project, located on 73 acres near the intersection of the Santa Ana (5) Freeway and Sand Canyon Avenue. The first phase totals 300,000 square feet across eight two-story buildings and is roughly 80% occupied.
The developer earlier this year kicked off work on the next phase of construction: seven low-rise buildings ranging in size from 20,000 to 64,000 square feet, and totaling about 260,000 square feet.
This month, Irvine Co. proposed a modification of the campus’ master plan. The proposal would reduce the total number of buildings in a new configuration, city filings indicate.
Irvine Co. Office Properties told the Business Journal the reconfiguration is for the third and fourth phases of the campus, which have yet to begin construction. The updates prioritize the campus’ larger buildings “that offer additional opportunities for open, flexible floor plans,” the company said.
It also plans to build an entire building for the company’s Flex+ product, a flexible leasing model launched in 2019 to offer employers turnkey workspaces with shorter-than-normal lease terms.
Innovation Office Park is still expected to total some 1.1 million square feet.
The developer has also begun marketing a new life sciences campus next to the University of California, Irvine.
The four-building, 532,000-square-foot development, dubbed Academy Point, would be the largest life science office campus of its type in Orange County.
Irvine Co. hasn’t disclosed a timeline for starting that project.