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[IMGCAP(1)]IRVINE, CA-In a year when the subprime mortgage mess hit it hard, the 100-million-square-foot Orange County office market finished 2008 with a group of substantial leases, a number of them in this city. Major tenants inked deals for office space totaling nearly 573,000 square feet in the last couple of months of the year, including one transaction—by the Federal Deposit Insurance Corp.—that filled some office space as a result of the same financial crisis that has emptied out hundreds of thousands of square feet in office building around the county.

The FDIC lease was a 200,000-square-foot deal at the new 40 Pacifica building in the Irvine Spectrum, a building that was developed and is owned by the Irvine Co., which signed a number of the county’s big leases near the end of the year. The FDIC took the space for three years with two one-year options to open what it describes as a temporary office to manage receiverships and to liquidate assets from failed financial institutions primarily located in the Western US.

[IMGCAP(2)]Other tenants that signed leases for substantial amounts of space in the final months of the year included Advantage Sales and Marketing, a consumer packaged goods sales and marketing agency that leased 48,000 square feet on the top two floors at the Irvine Co.’s 231,000-square-foot 18100 Von Karman Ave. building; document imaging company Kofax, which signed a 90,000-square-foot lease at the Irvine Co.’s 15211 Laguna Canyon Rd. building in the Irvine Spectrum; and Taco Bell restaurants, which committed to a 181,000-square-foot building owned by Ford Motor Co. in Irvine. In Brea, Nature’s Best signed an eight-year sublease for 27,226 square feet at 6 Pointe Dr., while Apollo Hospitality Group signed a 26,589-square-foot sublease for a seven and a half years at 6 Pointe Dr.

Those year-end deals totaled nearly 573,000 square feet and followed some larger leases that were signed earlier in the year, including Hyundai Motor Finance Co.’s 100,000-square-foot lease at the Park Place complex owned by Los Angeles-based Maguire Properties Inc. Park Place had been the headquarters of New Century Financial Corp., one of the largest of the subprime lenders to go under.

The group of large leases near year’s end brought some respite to an office market that began to feel the effects of the financial industry crisis in 2007 when subprime mortgage lenders and related firms based in Orange County began to flounder, many of them going out of business and vacating their office space. The county’s office market continued to struggle in the third quarter, the latest period for which results are available, posting negative net absorption for the third straight quarter in response to the ongoing effects of the credit crunch and the mortgage meltdown. Despite the signing of some large deals during that quarter, the office market overall registered higher vacancy, lower asking rates and an increase in total space available in a market that was once one of the strongest in the country.

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