Aviation electronics maker Rockwell Collins Inc. is relocating its regional operations from Tustin to Irvine after signing one of Orange County’s largest office leases of the year.
The Cedar Rapids, Iowa-based company, whose OC operations make in-flight entertainment, cabin electronics, and other electromechanical systems, signed a 175,000-square-foot lease for Alton Corporate Plaza, a low-rise, four-building office park.
Rockwell Collins will be leasing a little more than half of the 331,000-square-foot complex, which is owned by a venture between Hines Interests LP in Houston and a real estate fund managed by L.A.-based private equity firm Oaktree Capital Management LP.
The company has been in a three-building complex near the Santa Ana (I-5) Freeway and the Tustin Marketplace shopping center, about four miles from its new location.
Rockwell Collins occupies about 212,000 square feet in Tustin, where it has been since 2005. The company ranks as OC’s 12th largest aerospace and defense contractor by employee count, with 574 local employees as of April, according to Business Journal data.
No job cuts are expected as part of the pending move to Irvine.
The company was spun off in 2001 from what’s now Rockwell Automation Inc. It got into in-flight entertainment by acquiring Hughes-Avicom International in Pomona in 1997 and Irvine-based Sony TransCom in 2002.
Rockwell Collins moved its regional operations to Pomona before shifting to Tustin in 2005.
Efficiencies
Efficiencies in the layout of the more modern Alton Corporate Plaza space means that the tenant will be able to keep the same number of employees in a smaller Irvine office, with the ability to expand if needed, according to Louis Tomaselli, senior managing director for the Irvine office of brokerage JLL.
The relocation also saves the company from the distractions of trying to renovate its existing space while still operating there, said Tomaselli, who represented Rockwell Collins in the lease along with JLL Senior Vice President Steve Wagner.
The Irvine offices of Rockwell Collins will be getting a “massive build-out” in preparation for the company’s move in mid-2015, said Hines Managing Director Ray Lawler, who leads the company’s development and investment office in Irvine.
The space will include a lab component for Rockwell Collins, in addition to core office space.
The deal is one of two large office leases signed this year at Alton Corporate Plaza, which Hines and Oaktree bought in a pair of transactions in 2011 and 2012 for about $43.5 million.
Spireon
Earlier in the year, the owners landed Spireon Inc., a provider of GPS and other related mobile resource management technologies, for a 65,000-square-foot lease at the complex.
Spireon, which was at another Hines-owned building in Irvine, is expected to move into Alton Corporate Plaza shortly.
The two leases helped the landlords fill much of the empty space left by JPMorgan Chase & Co., which opted to shutter much of its banking and mortgage operations in Irvine shortly after renewing a 129,000-square-foot lease at the complex last year.
The complex is now about 85% leased, with 50,000 square feet of space available, according to Lawler.
JLL Executive Vice President Joe Bevan and Managing Director Wade Clark represented Hines in the Rockwell Collins and Spireon leases.
Busy Year
The two deals at Alton Corporate Plaza are among the larger local deals announced by Hines during a busy year of leasing for the landlord, which has been an aggressive investor in OC’s office market the past few years.
Hines’ office portfolio in Orange County now totals nearly 3 million square feet, including deals done on its own and with other investors. About 2.2 million square feet of that was purchased in partnership with Oaktree over the past few years.
The landlord said it has completed about 650,000 square feet of office leases in its OC portfolio this year.
Notable large recent deals include a 13-year, 125,000-square-foot renewal for Nobel Biocare USA Inc., a maker of dental implant technology, at Savi Tech Center in Yorba Linda.
Hines and Oaktree bought the Yorba Linda site about a year ago for a little more than $51 million. The complex is 95% leased, and Nobel’s space will be getting a major renovation as part of the renewal, which was signed in the past few weeks, Lawler said.
Other larger deals for Hines this year include Harvest Christian Fellowship, which leased 106,000 square feet at the 17600 Gillette building in Irvine, while media company The Enthusiast Network―formerly known as Source Interlink Media―signed a 61,000-square-foot lease at 1821 E. Dyer Road in Santa Ana.
The pace of leasing “is a direct reflection of the increasing demand for high-quality, well-located properties, the appeal of our strategic capital upgrades, and our deep broker and tenant relationships,” Lawler said.
Upgrades
The landlord and its financial partners are planning more upgrade-related expenditures moving into 2015, with a focus on leasing up some of their newer acquisitions, including Santa Ana’s State Fund building at 1750 E. Fourth St., and the six-building Brea Place campus in Brea.
“We are planning to execute nearly $15 million of capital improvements over the next six months” to drive leasing efforts in those buildings, said Mark Jacobs, managing director with Oaktree.
Hines and Oakrtee are also still working to land an anchor tenant for a new office development planned at 17850 Von Karman Ave., near Main Street and Von Karman in Irvine.
The airport-area project is slated to be nine stories and 242,000 square feet.
The two companies “are absolutely focused” on getting that project moving ahead in the next year, Lawler said.
