ALISO VIEJO, CA—Aliso Viejo is a business-friendly, prominent med-tech hub that has been drawing in businesses of many sizes for two decades. Following the start of the final phase of Summit Office Campus here, we spoke exclusively with Jeff Cannon, corporate managing director of Savills Studley, who is representing MicroVention in its 205,000-square-foot build-to-suit at the campus owned and developed by Parker Properties, about the Aliso Viejo office market, build-to-suits and the current marketplace dynamics in this area of Orange County.

GlobeSt.com: How would you characterize the office market in Aliso Viejo?

Cannon: Aliso Viejo is a prominent technology and medical-device corporate and research-and-development hub. It's a welcoming, business-friendly city, with thoughtful master planning, a concentration of high-quality office and flex product and proximity to Orange County's coast and freeway infrastructure. It offers access to an ample housing inventory, across a wide range of price points and a diverse labor pool—critical factors in attracting business to the city, along with a host of retail, hospitality, recreational and community services. Aliso Viejo is also a compelling value proposition as compared to other Orange County submarkets with similar amenities.

GlobeSt.com: Have there been many build-to-suits of the size of MicroVention's new space there?

Cannon: The city of Aliso Viejo has consistently attracted large, prominent corporate users over the past 20 years, and many of these companies have elected the build-to-suit option, including QLogic (165,317 square feet), Fluor (575,000 square feet), Pacific Life (246,000 square feet) and, most recently, MicroVention. Two of Southern California's most well-respected developers—Parker Properties and Shea Properties—are headquartered here and have significantly contributed to the quality and caliber of the design-build genre and the marketplace overall. Planning, proximity and product make this a very attractive market.

GlobeSt.com: How does a build-to-suit reflect current marketplace dynamics, and what are the challenges and benefits of this alternative?

Cannon: Tenants with size, smarts, clout, credit and cachet can take advantage of an opportunity to create an office environment specifically suited to their needs. A meaningful advantage of this alternative—as exemplified by MicroVention—is that the opportunity to design a workspace form the inside out can yield significant fiscal and space efficiencies, with the added benefit of gaining control. The build-to-suit is a very viable transaction solution in this marketplace, creating one more avenue large users should explore, as well as additional negotiating leverage as the office market tightens. The most significant challenge of a build-to-suit is timing and can require a three-year planning horizon, particularly for a complex project like MicroVention, which comprises multiple components including office, R&D, manufacturing, clean rooms and wet laboratories.

GlobeSt.com: What types of users are typical in this market, and what type of product are they seeking?

Cannon: All tenants considering the Airport Area and South County submarkets would naturally include Aliso Viejo on their list of alternatives. However, the users driving the big space plays here are vertically integrated in the tech, med-tech and medical-device sectors, as well as some aerospace and defense contractors and suppliers. Major tenants located in Aliso Viejo include TechSpace, Lennar Homes, Marvell Semiconductor, Avanir Pharmaceuticals and Telogis, to name a few. Companies are typically looking for office and flex space or a combination of both to accommodate R&D, lab facilities and even micro-manufacturing or light-assembly uses, in addition to administrative and corporate functions.

GlobeSt.com: What else should our readers know about this submarket?

Cannon: The submarket is becoming increasingly competitive as the economy and real estate values have recovered, with both landlords and capital markets being bullish on rental-rate growth. Tenants need to plan well head of lease termination to secure the best opportunity—whether this means staying and investing in current facilities or moving to a new location. Companies are very interested in understanding how facilities can translate into workforce productivity and sustainability, creating a greater focus on space configuration, design and amenities to attract and retain talent.