Plaza Tower Pushing Rent to Big City Rate

Plaza Tower Pushing Rent to Big City Rate

Mueller, Mark

REAL ESTATE: $6 per square foot could be among highest in Southland

If you’ re trying to find the most glamorous-and expensive-office space in Orange County, look to the top of 600 Anton Blvd.’s Plaza Tower in Costa Mesa.

The top two floors of the 21-story, stainless steel building next to South Coast Plaza are coming up for lease in late 2009. The Offices of South Coast Plaza, the office division of C.J. Segerstrom & Sons LLC, just started marketing the space.

The space isn’t going cheap.

The landlord is asking an eye-opening $6 per square foot, per month for the top two floors, which total about 38,700 square feet. That figure includes about $1 per square foot in monthly operating expenses.

The asking rent is more than $1 per square foot higher than any other OC office tower space now on the market, brokers said.

The “high price point is indicative of (our) bullish view on the Orange County office market and our superior competitive position within that market,” said Andrew Stinson, marketing director of the Offices of South Coast Plaza.

Other floors in Plaza Tower are being marketed in the $4 per square foot range-on par with other upscale Costa Mesa office buildings owned by South Coast Plaza.

The rents for Plaza Tower’s top floors easily are the highest rates quoted to date for any office space in the county.

They surpass the rents seen in buildings around Fashion Island in Newport Centerlong known as the county’s priciest-as well as rents being asked at towers going up in Irvine.

“Those are big city rates. It’s a great dealfor New York City,” said Randall Parker, managing director for Newport Beach-based brokerage Travers Realty, which represents tenants in lease deals.

The Plaza Tower rents appear to be among the highest in Southern California.

The Irvine Company is marketing space in Newport Center for as much as $4.75 per square foot. The company has advertised rates of as much as $4.30 for the top floors of its two towers being built in the Irvine Spectrum,

In San Diego, the Irvine Co.’s One America Plaza, the city’s premier office building, has rates listed as high as $4.10 per square foot. In Century City, the company’s towers run as high as $4.50 per square foot, according to its Web site.

Plaza Tower, designed by architect César Pelli in 1992, is considered the county’s nicest and most distinctive office building. Its proximity to Costa Mesa’s shops and arts hub gives the building cachet, Stinson said.

The building is owned by a partnership of the Segerstrom family’s South Coast Plaza and IBM Corp.

New York-based E*Trade Financial Corp. now leases the top two floors at Plaza Tower. The online financial services company has been subleasing the space to Commerce Energy Group Inc., which uses it for its headquarters.

The Offices of South Coast Plaza is looking to lure a Fortune 500-type company to the tower.

“The property would be great as the global headquarters for a firm like that,” Stinson said.

The building doesn’t bear the names of any tenants, something that wouldn’t change with a lease of the top floors.

“We view the building as a statement of architecture,” Stinson said.

Rents have been rising for the past three years in OC, according to Voit Commercial Brokerage LP. Landlords are expected to keep pushing the envelope on rents, market watchers say.

The county’s best office space goes for an average of $2.84 per square foot per month, according to the Newport Beach-based office of Grubb & Ellis Co. That is up about 11% percent from a year ago.

The six towers being built in the Spectrum and around John Wayne Airport are expected to charge rents in the $3.50 per square foot range, in order to justify development costs.

Rent gains through late 2009 could put some high-end buildings here closer to the rate Plaza Tower is asking.

Finding tenants to pay those prices will be the issue, according to broker Parker.

“You have to get to $4 (per square foot) before you get to $6,” he said.

Copyright CBJ, L. P. Jan 15-Jan 21, 2007

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