JPMorgan Chase & Co.’s new lease for its banking and mortgage operations in Irvine looks to be the largest office lease reported in Orange County so far this year.
The New York-based banking giant recently announced a new deal at Alton Corporate Plaza, a low-rise, four-building office center in the Irvine Business Complex at Alton Parkway and Aston Street. JPMorgan Chase will continue to occupy one of the four buildings at Alton Corporate Plaza, at 1833 Alton.
The complex is a few blocks from the southwestern edge of the Tustin Legacy development site.
JPMorgan Chase’s new lease totals 129,263 square feet; it’s the only office lease in excess of 100,000 square feet reported in the county this year, according to brokerage data.
Financial terms of the company’s new deal at the complex, which runs through mid-2020, were not disclosed. About half of the company’s space there is said to be used for private banking operations, while the remainder houses its mortgage lending arm.
The company’s mortgage operations have attracted attention from Wall Street this month in light of rising interest rates.
Chief Financial Officer Marianne Lake said earlier this month that JPMorgan Chase’s mortgage refinance volumes could drop substantially if interest rates remain unchanged or rise.
Lake also said pressure on the company’s mortgage refinance business resulting from the rise of mortgage rates in June had continued into July.
Largest Tenant
JPMorgan Chase’s new lease comes about a year before its prior least at Alton Corporate Plaza was slated to expire.
“Their continued presence, coupled with our significant upgrades to the overall campus, will continue to make Alton Corporate Plaza a desirable location for tenants, said Ray Lawler, managing director for the Irvine office of Houston-based Hines Interests LP.
The office complex, which is about 321,000 square feet, is owned by a venture between Hines and a real estate fund managed by L.A.-based private equity firm Oaktree Capital Management LP.
JPMorgan Chase is the largest tenant at the four-building complex.
Hines and Oaktree bought the property in a pair of transactions in 2011 and 2012 for about $43.5 million on a combined basis.
The 1833 Alton property—along with a 77,500-square-foot building at 1733 Alton that’s fully leased to Source Interlink Magazines LLC and Nexus IS Inc.—were bought in June 2011 for a reported $32.3 million.
The other two buildings, at 16800 and 16802 Aston St., were bought about a year ago for $11.2 million, according to property records.
Those two buildings, which total about 110,600 square feet, were previously called the Bay Technology Center but have been rebranded under the Alton Corporate Plaza name since last year’s acquisition.
The Aston Street buildings, which have about 90,000 square feet of available space, have undergone “significant” upgrades since the acquisition, including complete lobby renovations, according to the building’s owners.
The owners are looking at large tenants in the mold of JPMorgan Chase to take over a bulk of one or both of the two Aston Street offices.
“The tenant demand for differentiated space with single-building identity has been very strong,” said Joe Bevan, a broker with the Irvine office of Jones Lang LaSalle who represented Hines in the lease, along with colleague Wade Clark.
Chon Kantikovit of Cushman & Wakefield’s Irvine office represented JPMorgan Chase in lease negotiations.
Hines and Oaktree jointly own a few other office complexes in OC. They include Irvine Corporate Center, a 126,633-square-foot office in Santa Ana that’s part of the Irvine Business Complex, as well as a two-building, 405,130-square-foot office complex in Fullerton that holds the main local operations of defense contractor Raytheon Co.
