Mid-Rise Revolution

October 19, 2018

The largest office park in the Irvine Spectrum is getting larger, as is the portfolio of Orange county's dominant real estate company. Irvine Co. is taking the wraps off its latest batch of mid-rise offices at the Discover Park campus, roughly 135 acres of buildings near the intersection of Sand Canyon Avenue and Laguna Canyon Road next to the Santa Ana (5) Freeway.

Discover Park’s 24 offices run about 1.3 million square feet.

A quartet of three- and four-story buildings that total 370,000 square feet can be added to that, starting this month.

The glass-clad collection of recently-built offices, whose architecture and amenities packages models that of Irvine Co.'s two new high-rise towers next to its Spectrum Center outdoor mall, are being marketed as The Quad at Discovery Park.

Conservative estimates, which Irvine Co. officials declined to comment on, put the construction costs for the offices around $150 million; it’s one of the largest commercial real estate projects to open in Orange County this year.

The Quad’s opening marks another example of Irvine Co.'s aggressive ground-up office development efforts in the Spectrum area over the past three years; the cost of the work is estimated at more than $800 million factoring in other mid-rise projects being built within a few miles of Discovery Park.

Talent Hub

The new offices at The Quad are “designed to offer forward-thinking companies of all sizes a vibrant workplace that includes the next generation of amenities,” said Tom Greubel, vice president of leasing for Irvine Co.’s office division.

The developer’s pitch appears to be working. About two-thirds of The Quad’s space was already spoken for at the time of the offices’ opening.

That’s in keeping with the tight market in and around the immediate area; Irvine Co., which owns the majority of the 13 million square feet of office space in the Spectrum area, said its existing base of office properties in the southeastern portion of the area is more than 95% occupied.

The largest tenant announced so far at The Quad is medical device maker Vyaire Medical Inc., which is leasing nearly 185,000 square feet. It will shift its local operations from Yorba Linda.

Vyaire makes a variety of respiratory products; it was estimated to employ about 300 people in OC as of last year. It plans a hiring push for the new locations, the company said at the time its lease was struck.

Other notable tenants at The Quad include coworking firm Spaces. It will open its second Irvine location, and third in OC.

Spaces--which offers a variety of perks to smaller firms looking for high-end space with short lease terms-- is occupying some 41,000 square feet at the project, roughly the same amount it’s occupying at Irvine’s Intersect office campus, as well as Costa Mesa office complex The Met. It opened both locations in the past year.

Small businesses planning to take up residence at Spaces’ new digs won’t be the only ones getting access to a bevy of millennial-friendly amenities; Irvine Co. is promoting a variety of services and perks for all of its tenants.

Notable amenities at The Quad include Kinetic, a high-tech fitness center concept that Irvine Co.’s been rolling out in many of its office properties, as well as a 1.6-acre outdoor workspace that includes perks like TVs, firepits, barbecues, a pool table, bocce ball court, and multiple kegerators, which are small refrigerators that hold kegs of beer.

“The competition to recruit and retain top talent is fierce,” Greubel said.

The latest offering is designed “to inspire employees, enhance their lives and give the companies that operate here an edge,” he said.

Along with Spaces, Irvine Co. plans to target smaller businesses at The Quad by setting aside top-floor space at one of the four buildings for those looking for 2,200 square feet or more, Greubel said.

That offering, branded under Irvine Co.’s ReadyNow program, is for “smaller customers who want a little more identity” than what they’ll typically get at a coworking space, he said.

Existing buildings at Discovery Park have monthly rents in the $2.60 per square foot range. Irvine Co. hasn’t disclosed what it’s asking for space at The Quad; real estate sources tell the Business Journal that rates starting around $3.25 per square foot are likely.

More Underway

The Quad is the second set of mid-rise offices on Sand Canyon Avenue that Irvine Co. has opened in the past year, it also built a pair of buildings a few blocks away at its Sand Canyon Business Center that toal about 211,000 square feet.

More is on the way for Discovery Park, whose offices hold the headquarters of a number of notable Orange County technology-focused businesses, including Kofax Inc., Mavenlink Inc., Crowdstrike Inc., and Ready at Dawn Studios LLC.

This past summer, construction work began on an additional trio of Discovery Park buildings: a three-story building and a four-story building across the street from The Quad at 505 and 525 Technology Drive as well as a four-story building at 15555 Laguna Canyon Road.

They broke ground around the same time Irvine Co. kicked off the first phase of its Spectrum Terrace project a few miles away near the intersection of the San Diego (405) Freeway and Laguna Canyon Road.

That mid-rise office complex, on the site that previously held the Cavalia horse show, will total some 900,000 square feet. The three-building first phase of the project will run some 330,000 square feet, and should open in about a year.

The three new for-lease additions to Discovery Park should open next spring. They’ll total 290,000 square feet, bringing the total there to just under 2 million square feet.

The site is already the largest collection of offices that Irvine Co. owns in the Spectrum area, and will be its second-largest business park in Orange County once the additions are built out.

By comparison, the 36 buildings at Irvine Co.’s 170-acre UCI Research Park--its largest building campus in OC-- totals some 2.2 million square feet.

Both UCI Research Park and Discovery Park are entitled for additional office development, according to Greubel.

Between its Discovery Park, Sand Canyon Business Center and Spectrum Terrace projects, Irvine Co.’s office division has conservatively estimated committed an estimated half billion dollars on mid-rise product in the Spectrum area since the start of 2015.

Combined with its two new high-rise towers nearby 200 and 400 Spectrum Center, Irvine Co.’s recent office development efforts in the Spectrum are now approaching the 2 million square foot mark.

That’s roughly the same as the combined totals of all other ground-up office developments in Orange County over the same period.  

Originally published on 10/8/2018, Orange County Business Journal

 

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