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ALISO VIEJO, CA-One of the final phases of the 1.8-million-sf Summit Office Campus moved a step closer to completion recently when developer Parker Properties began hoisting the steel into place for a 250,000-sf building that will house new Pacific Life Insurance Co. offices. Kevin McKenzie, president of Parker Properties, tells GlobeSt.com that when the Pacific Life building and two other buildings totaling 260,000 sf of spec office space now under construction at the Summit campus are completed, the developer will have only 211,000 sf of office space remaining for development at the 65-acre project at Aliso Viejo Parkway and Enterprise.

The nine-story Pacific Life building, a build-to-suit for the insurance company, is due to be completed in 2008 and will house some 1,100 Pacific Life employees in what will be the tallest building in the suburban Aliso Viejo market. The Pacific Life building is at 45 Enterprise, and the two spec buildings, four stories each, are at 20 and 30 Enterprise.

The new office space will join another phase of the Summit that is now under construction, a Renaissance/ClubSport full-service 174-room hotel and fitness resort that is due to be completed in January. Once the new offices and the Renaissance are in place, the only building remaining to get under way at Summit will be an eight-story, 211,000-sf office tower at 35 Enterprise.

When Parker completes the final phase of construction at the Summit, it will mark the culmination of a dozen years of planning and development at the campus, McKenzie observes. Aliso Viejo has evolved into a full-service office market during those dozen years, he says, pointing to the Pacific Life deal as a sign of that evolution.

The Pacific Life deal represented “a big win” for the Summit campus because Pacific Life “was exploring all of Orange County” for office space, according to McKenzie, who notes that the insurance firm will keep its headquarters location in Newport Center. “For them to decide to consolidate and to commit to Aliso Viejo was a real testament not only to the merits of South Orange County as an office location but also to Aliso Viejo and the Summit,” he says.

The new speculative office space at the Summit comes at a time when the Orange County office market is the focus of concern about the problems besetting the subprime lending market. The mortgage industry, including subprime lenders, occupies about 2.7 million sf of the 94 million sf of office space in the county, according to research by Parker, which does not have any subprime lenders as tenants at Summit.

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

McKenzie says it’s too soon to tell whether Orange County is “taking a long pause or whether there are some systematic challenges we are facing over a longer period of time.” The subprime market will cause “some pain” in the market and there will be further contraction in the subprime industry, but “I don’t see it as a long-term systematic problem,” he says.

Citing the diverse composition of the Orange County office market, McKenzie points out that a variety of prospective tenants are talking to Parker about space in its 20 and 30 Enterprise buildings, and the company has started design on the Summit’s last 211,000 sf at the 35 Enterprise building. “Our discipline has always been to build an amount of space that we can foresee the market absorbing, and then, when that is about 50% leased, we ramp up on the next phase,” he says.

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