By james art Three banks renewed their office leases for a total of 300,000 square feet in Irvine, marking some of the larger new leases in Orange County.
Pacific Premier Bancorp, JPMorgan Chase, Wells Fargo have recommitted to their offices, bucking a local trend of tenants looking to downsize to offices smaller than 20,000 square feet, the Orange County Business Journal reported, citing CBRE and Cushman & Wakefield.
All of the renovations came at the Irvine Business Complex, which is located in the submarket area of John Wayne Airport.
City-based Pacific Premier renewed a 115,400-square-foot office lease at its headquarters at 17901 Von Karman Avenue. The bank occupies half of the 12-story tower, whose lessor has not been disclosed.
New York-based JPMorgan has renovated 173,200 square feet of office space at 3 and 5 Park Plaza, owned by the Irvine Company.
San Francisco-based Wells Fargo has renewed 53,000 square feet of office space at 2030 Main Street, bucking the larger trend of what CEO Charles William Scharf called a “disorganized” office market nationally.
“In our commercial portfolios, losses continue to be driven by office properties with commercial properties, where we expect losses to remain modest,” Scharf said during the second-quarter earnings call.
“The fundamentals of the institutionally owned office property market continued to deteriorate as lower valuations reflected the weak leasing market in many major metropolitan areas across the country.”
Orange County is taking some of the lump, with recent leasing relatively weak, according to the Business Journal.
Businesses in the region “don’t need as much space as they once did,” according to a CoStar analysis of the Orange County office market last quarter.
“Office tenants are increasingly leasing smaller-sized office suites in the area, and only a handful of leases over 50,000 square feet of office space were signed this year, down from more than 10 signed last year and an average of 20 signed annually over the past decade,” CoStar researcher Jesse Gundersheim said in the analysis.
Office leasing between 20,000 and 50,000 square feet has been slow, with 30 such deals signed this year — down from more than 50 such deals signed for 2022 and 2023, he said.
Year-to-date leasing volume for offices 20,000 square feet or larger represented 19 percent of all leasing activity — a “historic low.”
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At the same time, JLL found that OC leasing volume increased 5 percent in the latest third quarter compared to the prior quarter, with lease renewals dominating the market.
This month, Mountain View-based Google renewed its lease for 196,200 square feet of office space in the two-building office campus at 19510 and 19520 Jamboree Road in Irvine.
— Dana Bartholomew