The Orange County Social Services Agency is expected to move its headquarters from Santa Ana to Orange in what would be OC’s largest new office lease of the year.
The agency is in talks to relocate its main offices to the Orange Center Tower, a 14-story building near Angel Stadium of Anaheim.
It would lease 132,133 square feet of the office, which was acquired this year by a unit of Starwood Capital Group.
The 15-year lease is valued at a little less than $60 million, according to documents filed with the Orange County Board of Supervisors, which oversees the agency and must approve the lease.
Time Frames
A decision on the contract could be made as soon as this week, according to the board of supervisors’ meeting agenda for the week.
If a deal is finalized, the agency could move into the new space around the start of next year. More than 400 employees would make the move from Santa Ana to Orange as a result of the relocation.
No new office lease larger than 100,000 square feet has been announced in OC this year, not counting lease renewals, according to local brokerage data.
The deal would go a long way toward filling up Orange Center Tower, which is at 500 N. State College Blvd. and was previously known as the 500 Orange Tower.
Greenwich, Conn.-based Starwood bought the 280,340-square-foot office tower in late January for an estimated $70 million.
The building was about 40% leased at the time of the sale. Bethesda, Md.-based CWCapital Asset Management LLC sold it to Starwood as part of a larger national portfolio sale of troubled real estate assets and loans.
Starwood also acquired 3800 Chapman, an eight-story, 172,000-square-foot office in Orange, in the portfolio sale. The 3800 building is believed to have traded hands for about $25 million.
Both buildings were previously owned by Los Angeles-based MPG Office Trust Inc., which was Orange County’s second-largest office landlord at the peak of the last real estate cycle.
MPG, previously known as Maguire Properties Inc., picked up the buildings in 2007 as part of its $2.9 billion buy of OC and L.A. offices from Equity Office Properties Trust.
Maguire fell behind on its debt payments for the buildings in the economic downturn and softening local office market, placing them in a multiyear state of limbo as their ownership and financing issues were being sorted out.
Starwood is planning a new parking structure for Orange Center Tower, according to documents detailing the proposed lease that have been filed with the board of supervisors.
The new landlord would also provide about $6.6 million in tenant improvements in conjunction with the social services agency’s move.
Other Options
The agency operates out of a 113,026-square-foot building at 888 N. Main St. in downtown Santa Ana. It’s been at that location since 1997 and occupies the entire building.
Orange County Social Services, which plans and operates child support, welfare and other county services, is the largest public agency in OC. It serves an average of one in every seven Orange County residents, or nearly 500,000 people, every month, according to the agency.
According to its website, the agency’s annual budget is about $741 million, of which 88.3% is funded with federal and state money, 6.6% through Orange County’s general budget fund, and 5.1 % from other sources.
Filings with the board of supervisors said the agency’s current landlord, a unit of developer Mike Harrah’s Caribou Industries, has offered to make substantial renovations to the agency’s North Main Street property in order to keep the tenant.
Discussions between the agency and the landlord were ongoing as of earlier this month, according to the filings.
Orange Center Tower’s extra space, newer design, and proximity to the Santa Ana (I-5) Freeway and other agency facilities in OC provides a better option, according to a board of supervisors staff report recommending the agency’s relocation.
The agency also looked at other spaces in Irvine and Santa Ana as potential options for a new home, including the Grand Avenue headquarters of the Orange County Register.
Not all recommendations for relocations involving large local agencies overseen by the board of supervisors have gone as planned.
Late last year, the Orange County Transportation Authority was close to buying the State Fund Building in Santa Ana to serve as its new headquarters and administrative building in a $42.5 million deal.
A last-minute, improved lease offer from its existing landlord ultimately kept the transportation agency at its Union Bank Square office complex in Orange. That renewal was for about 138,000 square feet.
