True Creative Office Won't Fit Everywhere

IRVINE, CA—Areas where tenants are focused on competing for talent are better candidates for true, amenitized creative-office space, Bixby Land Co.'s president and CEO Bill Halford tells GlobeSt.com exclusively. As GlobeSt.com reported last week, the firm has acquired a 262,463-square-foot corporate headquarters building at 9950 Jeronimo Rd. here for $44.25 million from Kawasaki Motors Corp. USA and is planning an extensive $20-million redesign to meet the growing demand for modern workspaces in Orange County, especially from larger tenants. We spoke with Halford about the lack of creative space in the 40,000-square-foot-100,000-square-foot range in Orange County, the true meaning of creative-office space and why it won't work in every market.

GlobeSt.com: How is the market responding to the void of creative space in the 40,000-to-100,000-square-foot range in Orange County?

Halford: We're not just doing this in Orange County; we're doing it in Silicon Valley, L.A. and San Diego as well. The basic thesis is that this kind of space is highly desirable, yet the supply of it is far below the demand. So, it's really well received in all of these markets.

GlobeSt.com: How much creative-space development do you think will occur in Orange County, and how quickly do you think it will happen?

Halford: If you look at Orange County, 9950 Jeronimo Rd. will be our fourth project, so we are doing this speculatively. It's not been done at all—nobody's done it—but the demand will absolutely continue. The question is where it's going to come from. In Playa Vista, there's some ground-up product that's creative and different and modern workplaces, but it hasn't been widespread. In Silicon Valley, we've done several projects, and a little bit in San Diego, but not many are doing the caliber of projects that we're doing here.

GlobeSt.com: What separates the redesigns your firm does from other developers' designs?

Halford: First of all, it's a quantity issue. Not many people are producing it. In terms of the kinds of features we put into all these projects, they're heavily focused on outdoor space, with various types of amenities from dog parks to fire tables to seating areas to an outside bar and living room to bocce-ball courts. These are all features that tend to make the workplace more like your home than what we think of as an office. Why more people aren't producing it I don't know—it's costly to produce, but there are a number of people who have taken B buildings and done a number of things to them and tried to call them creative office, but they're pretty marginal. The best example of somebody who's done it is Jeff Worthe with the Reserve in L.A.

GlobeSt.com: What other submarkets within Orange county interest you for this type of development?

Halford: This isn't a product type that fits in every market. Essentially, it works in the high-end markets where you have employers that are trying to attract and retain talent. They tend to be younger companies and companies where the employee base is focused on those amenities. We're looking at higher-end markets like Sorrento Mesa in San Diego and the Irvine airport area. But I don't think it really fits in commodity-oriented areas. Jeronimo will be in the Spectrum. People looking for a commodity will not pay for this. An insurance company in Central Orange County is not really a candidate for that. It tends to work in markets where employers are more focused on talent. San Francisco is an example of that, obviously, and the airport area in Irvine, Westside in L.A., Playa Vista and moving down to El Segundo where we did a project. These are areas where tenants are focused on competing for talent.