Today’s companies are seeking out office spaces that go beyond four walls by incorporating elements of live, work and play. Mike Paleo, Senior Vice President for our Orange County office, recently shared his insights into the current trends on an Association for Corporate Growth, Orange County commercial real estate panel—including how he’s helping clients locate workspaces that offer far more than standard cubicles and meeting rooms. The panel brought together experts in finance, design, human resources and commercial real estate to discuss how the market is shifting toward offices that better reflect companies’ values and inspire workers to want to be in the office.
Whether in a hybrid or full-time capacity, people are returning to the office, and thanks to ample available commercial space and landlords eager to find tenants, companies are in the driver’s seat when it comes to securing prime office space for extremely favorable terms.
“People are transitioning back to the office and businesses want amenities,” Mike says. “They want a coffee shop downstairs and high ceiling creative offices on the ground floor, places to meet inside the building, gym access, WiFi and connectivity outside and places to grab lunch nearby. Business leaders want their space close to the freeways for easy access. Tenants are now even able to negotiate upgrades years before their lease expiration—it’s the ‘flight to quality’ and it has never been a better time to be a tenant.”
He notes that tenants can get phenomenal deals right now with longer lease terms that include major benefits like rent abatement, moving allowances, phase-ins and tenant improvement allowances.
During the discussion, which included representatives from Cohen & Steers, Real Estate Development Associates and CorHR, panelists discussed how vacant real estate–particularly large retail spaces and malls—can be reimagined as multi-use campuses that include a mix of retail and offices along with natural design elements. Mike mentioned Fashion Island in Newport Beach as a model for future office complexes—with its combination of high-end stores, casual and upscale dining, entertainment options, and fitness facilities, along with plenty of green and modern spaces.
These projects are a win for everyone. They offer a way to revitalize downtowns, provide an opportunity for employees to connect and collaborate, and offer a way for property owners to make their buildings profitable again.
Orange County has ample commercial space available—with 23.2% of inventory available according to the latest figures from CoStar. Still, there have been some big recent commercial moves–including Apple moving into two buildings at Spectrum Terrace (+170,954 SF), and New York Life Insurance taking over 2400 E. Katella Avenue (+23,133 SF)—and sublease space overall continues to decline. Many commercial clients are looking to be part of the three most popular submarkets—Irvine airport, South Coast Metro, and Irvine Spectrum, where Class A properties are in high demand. And for businesses considering a move to one of these hotspots, the market has never been more favorable.
With a wealth of experience and connections in the area, Mike and our team at Hughes Marino can help secure sought-after spaces where clients can get the full work-life-play experience–including opportunities for biking and walking, accessible shops and restaurants, and inspiring meeting areas—while also taking a creative approach to lease agreements to ensure tenants get the amenities and extras they want, without additional costs.
“More than ever, tenants have options to reduce their rent, relocate their business or even upgrade their current space,” says Mike. “It is tremendously valuable to have a tenant rep broker by your side as you negotiate with a landlord. There’s so much opportunity for being more creative, auditing the footprint you currently have, and redesigning it for the future—and we can help clients navigate that process from start to finish.”
