Tall Reputation, Top Rents At 200 Spectrum

October 10, 2016

The 21-story tower opened its doors this year as Orange County’s tallest building, a glasssheathed standout on the landscape of the Irvine Spectrum, where it quickly drew the attention of professional and amateur photographers, enjoying a star turn on Instagram.

The company’s lease totals 44,239 square feet comprising the 17th and 18th floors of the tower, according to data from CoStar Group Inc.

Crown Castle will relocate employees from nearby offices in the Spectrum to the new location, which is next to the Spectrum shopping center.

The company operates some 40,000 cell towers in the country, in addition to more than 15,000 small cell sites and other assets, and it touts itself as the country’s largest provider of wireless infrastructure.

Other publicly traded infrastructure firms it competes with include American Tower Corp. in Boston and Boca Raton, Fla.-based SBA Communications Corp.

Another competitor with local ties, Newport Beach-based Mobilitie LLC, bills itself as the largest privately held wireless infrastructure provider in the country.

Well-Known Neighbors

Crown Castle’s lease is the second largest transaction reported at the Irvine Company- owned building, which also is home to the North American headquarters of Japan- based Mazda Motor Corp., OC’s largest automaker by employee count.

Mazda’s lease is for about 102,000 square feet on some of the lower floors, and the top of the tower bears the carmaker’s logo.

Other tenants with sizeable leases at the new building include smart technology company Greenwave Systems Inc.; WeWork, a New York-based provider of office space to entrepreneurs; and Curse Inc., a gaming company that was acquired in August by Twitch.tv, a live-streaming site owned by Amazon.com.

The tower is now about 80% leased, according to Newport Beach-based Irvine Co., which is in the midst of building a sister building two blocks away at 400 Spectrum Center. That building is scheduled to open next summer.

About half of the tenants announced for the 200 building are relocating from elsewhere in the Spectrum.

The top three floors of the 200 Spectrum tower are among the space not yet leased, according to CoStar records.

Those floors aren’t going cheap, according to the landlord.

Irvine Co.’s website lists space on the 21st floor at a monthly rate of $5.25 per square foot.

That’s the highest asking rent of any large building in Orange County, outside of properties in Newport Beach, according to CoStar data.

Irvine Co.’s four other existing office towers in the Spectrum area have asking rents that max out at $3.60 per square foot for available space, according to the company’s website.

The average asking rent for office space in the Spectrum area—which totals about 8 million square feet—now runs about $2.67 per square foot, well above the county average of $ 2.29 per square foot, according to the latest quarterly data from the Irvine office of brokerage Cushman & Wakefield.

The vacancy rate in the Spectrum area’s office market is a little more than 6%, one of the lowest submarkets in Orange County, which has an overall vacancy rate of 11.2%, according to Cushman’s & Wakefield’s data.

Financial terms of Crown Castle’s lease at 200 Spectrum were not disclosed.

Record Rates

Irvine Co., OC’s dominant landlord with a local office portfolio in excess of 25 million square feet, has had its share of top-dollar leases inked in the area this year.

Tarsadia Investments LLC, a Newport Beach- based private investment firm with ties to the area’s hospitality industry, this year completed an 18,000-square-foot lease to take over the top floor of Irvine Co.’s 520 Newport Center Drive office tower next to Fashion Island.

Tarsadia is believed to be paying monthly rents of $8.50 per square foot or more for the top floor of the 21-story tower, which opened in late 2014, according to real estate sources.

There had never before been reports of a full-floor office lease in OC topping a $7per- square- foot monthly rate, let alone $ 8 per square foot.

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