Cruzan's “make” office project at 5600 Avenida Encinas in Carlsbad, CA

After a roughly eight-year hiatus during and after the Great Recession, speculative office development is finally returning to the Southern California marketplace. While much of the construction taking place can be classified as redevelopment or adaptive reuse due to land constraints in the region, the fact that spec development is happening at all is a testament to the national and local economy and the industry's confidence in Southern California as an attractive market for jobs. Real Estate Forum spoke with several office-development experts in Los Angeles, Orange County, San Diego and the Inland Empire to get their take on this growing trend, why now is the right time for it, the type of development taking place and where, and where they see the trend heading in the future.

experience office users seek at the Boardwalk, a 545,000-square-foot, class-A, spec-office development in the heart of Irvine's CBD. “Our design includes two nine-story towers connected by enclosed bridgeways and terraced walkways, highly efficient 30,000-square-foot floor plates with the ability to bridge buildings for up to 65,000 square feet on a single floor, two acres of carefully designed outdoor space, on-site retail and a comprehensive indoor and outdoor amenity package.”

Makers Quarter and Pacific Gateway—will probably wait to secure an anchor tenant or tenants before commencing construction, Meronoff says. Cisterra did this with its recently completed Sempra Headquarters building in East Village. “However, Downtown is highly amenitized and exploding with a well-educated Millennial population, so it seems as if it's just a matter of time before it does support a major, speculative office development,” says Meronoff. “The growing migration and organic development of technology firms sprouting up Downtown will further support future office development. Also, the Downtown environment supports mixed-use development better than any other San Diego submarket.”

Gary Steinhardt, American Realty Advisors

investments in MMI's Newport Beach, CA, office, tells Forum. “This year, M&D Properties will complete the Source Tower, a mixed-use project that includes a seven-story 52,343-square-foot, high-tech office building located in a prime area of Buena Park. In Irvine, the Spectrum, a 21-story, 425,000-square-foot, class-A office building is scheduled to be delivered by the Irvine Co.; the building will be completed in 2016.” And, as Bak mentioned, Trammell Crow is developing the Boardwalk, an office campus on Jamboree Rd. in Irvine on 7.5 acres; completion is expected in the spring of 2017.

Instant Insights /

Real Estate Southern California: Spec Office Development Is Back in Gear

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