Irvine Co. is planning a new, 532,000-square-foot life science office campus in Irvine that aims to boost Orange County stature in the biotechnology and healthcare sectors against nearby markets like San Diego.
Marketing materials from the Newport Beach-based developer indicate the project will be on the northwest corner of Irvine Co.’s UCI Research Park office campus, a 36-building business park next to the University of California, Irvine.
The project, as currently planned, will include four four-story buildings each totaling 128,000 square feet of lab-ready space geared specifically for medical, healthcare and biotechnology tenants whose work focuses on living things, the developer’s marketing materials indicate. It would be the largest project of its type in the county.
The site for the development, near the intersection of MacArthur Boulevard and University Drive, is currently fenced off and appears largely graded. No vertical construction appeared to be underway as of last week.
A new Cushman & Wakefield market report indicates Irvine Co. could break ground by the end of the year on the office campus, dubbed Academy Point. Other local brokers indicate current market conditions may keep the construction timeline in limbo for the time being.
Irvine Co. declined to comment on the project, which would be the third large office development currently underway in the city by OC’s largest office landlord, as it prepares to deliver the third and final phase of Spectrum Terrace.
Great for OC
A website for the project touts Academy Point as “the only OC life science campus with direct access to UC Irvine, leading research hospitals, top medical device companies and life science incubators.”
Brokers tell the Business Journal that Irvine Co. may hold off on construction until it secures an anchor tenant due to the high-interest rate environment and still-uncertain office market, rather than building on a speculative basis, as it has done for other big projects of late.
Such a development would be a boon for Orange County, Newmark Executive Vice President Greg May told the Business Journal.
“We really need a purpose-built incubator lab building for life science startups in OC, like they have done in San Diego,” May said. “It would be great for OC if they built it.”
This was echoed by Nico Napolitano and Jeff Cole of Cushman & Wakefield, who noted life science tenant interest will spur additional investment by way of conversion or redevelopment transactions.
“San Diego has slightly over 21 million square feet of life science inventory with approximately 3.7 million square feet under construction,” they told the Business Journal via email. “San Diego’s inventory base was largely born from redevelopments of what used to be underutilized traditional office space. This has simultaneously created a healthier leasing market for office owners.
“We would expect a similar outcome in Orange County.”
Competitors
The life science industry is a fast-growing one in Orange County, though the sector has failed to burgeon as fully as it has in other neighboring markets.
San Diego, for example, ranked as the third-largest life science market in the U.S. this year, according to a report from commercial real estate website CommercialCafe.
San Francisco came in at No. 2, followed by Boston in the top slot.
“Orange County, especially with recent healthcare investments, checks all the boxes” of what life science tenants are looking for: “academic collaboration, quality of life, and industry synergies to attract and retain a talented workforce,” according to Napolitano and Cole, but the region “has yet to deliver a concentrated life sciences cluster location that provides the synergies required by inquiring tenants.”
A project by the Irvine Co. would “set the trap on what will be the epicenter of the next ‘core cluster’ SoCal life sciences market,” they added.
OC Growth
Orange County counts the fourth-largest life science workforce in California, according to marketing materials for Academy Point.
Some of the top life science companies with notable Orange County operations include Irvine-based Masimo Corp. (Nasdaq: MASI); Irvine-based Inari Medical Inc. (Nasdaq: NARI); Minneapolis-based Medtronic PLC (NYSE: MDT); and Allergan Aesthetics, the Irvine-based unit of Chicago’s biopharmaceutical giant AbbVie Inc. (NYSE: ABBV).
OC’s most valuable public company, Edwards Lifesciences Corp. (NYSE: EW), counts a local workforce of around 4,700 at its recently expanded campus in Irvine.
During the third quarter, Orange County technology and life science tenants raised nearly $1.3 billion, a more than 350% boost over the second quarter, according to a report from the Irvine office of JLL.
UCI Research Park
Academy Point would be the latest investment from Irvine Co. for the 185-acre UCI Research Park campus; it spent upward of $100 million to redesign and upgrade the campus in 2018 following the departure of Broadcom.
The San Jose-based chipmaker, previously based in Irvine, at one point occupied more than 900,000 square feet at the business park; its local operations are now in a smaller base of offices at the Five Point Gateway campus on the other side of town.
Tenants that have expanded their operations at UCI Research Park in recent years include Acorns Grow Inc., Skyworks Solutions Inc. and Toshiba America.
The Cove, UCI’s tech facility and office space that is home to the school’s UCI Beall Applied Innovation business and entrepreneur incubator program, is also a tenant at the office park.
Innovation in the Spectrum
Among larger area office developments, Academy Point would join Innovation Office Park and Spectrum Terrace, both also led by Irvine Co.
Brokers indicate Irvine Co. will deliver the third and final phase of Spectrum Terrace at the end of this quarter, bringing the campus office total to roughly 1 million square feet. It is also expected to wrap construction on the second phase of Innovation Office Park, totaling 258,500 square feet, this quarter, with another 531,000 square feet of planned future development at the low-rise campus, according to Cushman & Wakefield.
