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June 30, 2014
John Wayne Needs More Office Space
Hondo don't need condos. Newport Beach's John Wayne Airport submarket has demand for Class-A (or even updated B) office, and supply is lacking.
Kearny Real Estate Co partner Hoonie Kang says that Kearny and AEW Capital Management recently acquired the 172k SF Newport Corporate Plaza in the John Wayne Airport submarket and are planning to upgrade it, specifically with the area's tenant base in mind. Most of the businesses in the submarket are professional service firms who need about 10k SF, Hoonie explains. But a lot of the office space in the market hasn't been upgraded in at least 20 years (the amenities still include tube socks and snap bracelets), meaning that properly repositioned properties will have an edge.
The acquisition includes five single-story buildings and ground leases on 12 land parcels with one building on each parcel. Collectively the buildings are 80% leased. According to Kearny managing partner Jeffrey Dritley, the new owners' long-term options for the property include creating a new master plan that features other uses, or an exit strategy that allows a sale as a whole, in parts, or individually.
Go Easy on That Open Space
The next thing in creative office space is a little less openness, Hughes Marino CEO Jason Hughes tells us (snapped at that ancient example of open space, Machu Picchu, with Hughes Marino COO Shay Hughes, his wife). It's becoming clear from a number of studies that completely open office space impairs employees' ability to concentrate, Jason says. People resort to putting on headphones to shut off too much interaction. So a mix of public and private space is optimal.
Hughes Marino, an Irvine-based brokerage, recently completed its own creative office space concept at 2 Park Plaza, Suite 750, which reflects this kind of mix. It includes private offices along the exterior of the space, while the interior feels more like a home than a traditional office, Jason says, with the shared space variously designed as a living room, a family room, a kitchen and a dining room. Like a home, one of the office walls features framed photos of employees with their families.
The New Retail Experience
The Shops at Mission Viejo GM Kurt Webb tells us that experiential retail might be the thing now, but not just any experiences. The key is listening to customer feedback and tweaking the total experience at a particular property, not just holding events. That includes the details—soft seating areas, family restrooms, free Wi-Fi, updated play areas—and the big-picture features, such as EV charging stations or a mix of retailers. Simon Properties, which owns the mall, named Kurt GM this month; previously, he was GM of a Simon mall in Washington State.
Kurt adds that old-fashioned events have their place in experiential retail, too, such as the Shops at Mission Viejo Kidgits' Club events for children or events like Indulge, meant for moms leading up to Mother's Day. And every now and then, it doesn't hurt for a celebrity to drop by, such as when Halo's master chief stopped by the Microsoft Store at the Shops at Mission Viejo to check out the new Surface Pro 3. He's the one in the middle.
YOU TELL US: Millennials and the 'Burbs
Millennials are ditching their cars for public transit, bikes, and walking and have more money to spend on rent (and non-prescription eyeglasses). But when they have get married and have families, many believe they'll head back to the 'burbs. So are today's urban developers over-relying on the tastes of Millennials who might not be in their projects 10 years from now? Tell us your thoughts by clicking the poll to the left, and make sure to read our special report on walkability in this week's National Real Estate Bisnow newsletter.
The student was an aggressive learner. He hit the books. Send ideas, suggestions, and your favorite misunderstood lyrics to dees.stribling@bisnow.com
