The nine-story Pacific Life building, a build-to-suit for theinsurance company, is due to be completed in 2008 and will housesome 1,100 Pacific Life employees in what will be the tallestbuilding in the suburban Aliso Viejo market. The Pacific Lifebuilding is at 45 Enterprise, and the two spec buildings, fourstories each, are at 20 and 30 Enterprise.

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The new office space will join another phase of the Summit thatis now under construction, a Renaissance/ClubSport full-service174-room hotel and fitness resort that is due to be completed inJanuary. Once the new offices and the Renaissance are in place, theonly building remaining to get under way at Summit will be aneight-story, 211,000-sf office tower at 35 Enterprise.

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When Parker completes the final phase of construction at theSummit, it will mark the culmination of a dozen years of planningand development at the campus, McKenzie observes. Aliso Viejo hasevolved into a full-service office market during those dozen years,he says, pointing to the Pacific Life deal as a sign of thatevolution.

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The Pacific Life deal represented "a big win" for the Summitcampus because Pacific Life "was exploring all of Orange County"for office space, according to McKenzie, who notes that theinsurance firm will keep its headquarters location in NewportCenter. "For them to decide to consolidate and to commit to AlisoViejo was a real testament not only to the merits of South OrangeCounty as an office location but also to Aliso Viejo and theSummit," he says.

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The new speculative office space at the Summit comes at a timewhen the Orange County office market is the focus of concern aboutthe problems besetting the subprime lending market. The mortgageindustry, including subprime lenders, occupies about 2.7 million sfof the 94 million sf of office space in the county, according toresearch by Parker, which does not have any subprime lenders astenants at Summit.

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Some sources estimate the figure at more than 2.7 million sf,but McKenzie says the important question is whether the subprimeproblems pose a long-term concern for the county's office market."When I think about 2.7 million sf of mortgage industry space on abase of 94 million sf, it doesn't send shivers down my spine,"McKenzie says. "It's not a good thing, but it's not adisaster."

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McKenzie says it's too soon to tell whether Orange County is"taking a long pause or whether there are some systematicchallenges we are facing over a longer period of time." Thesubprime market will cause "some pain" in the market and there willbe further contraction in the subprime industry, but "I don't seeit as a long-term systematic problem," he says.

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Citing the diverse composition of the Orange County officemarket, McKenzie points out that a variety of prospective tenantsare talking to Parker about space in its 20 and 30 Enterprisebuildings, and the company has started design on the Summit's last211,000 sf at the 35 Enterprise building. "Our discipline hasalways been to build an amount of space that we can foresee themarket absorbing, and then, when that is about 50% leased, we rampup on the next phase," he says.

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