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Parker Properties Gets Back on Growth Track


REAL ESTATE: Pair at Summit near full, final office eyed there By Mark Mueller Sunday, August 28, 2011

Aliso Viejo-based Parker Properties LLC is starting to think about growth after a trying 2010, with the fresh focus pushed along by a string of lease deals at its two newest offices at its Summit Office Campus project.

A new office project in Aliso Viejo-as well as developments and construction-management projects in other parts of Southern California-are being eyed by the company.

The developer appears to have weathered the latest downturn, as well as the loss of its chairman and founder, John Parker, late last year.

"We're not going away-we're still moving ahead," said Lee Redmond, Parker Properties' chief executive, who runs the company along with Vice Chairman Russ Parker.

A flurry of recent leasing activity at 20 and 30 Enterprise, both part of the developer's 1.7-million-square-foot Summit campus alongside the San Joaquin Hills (73) Toll Road, is providing much of the optimism for the company of late.

With the exception of one space being set aside for a restaurant or club, the two buildings now are essentially full, executives said last week.

Russ Parker: "we think we've put the dollars where you can see them"

Close to 141,000 square feet of new leases and expansions of existing tenants' space have come at 20 and 30 Enterprise over the past six months.

Local businesses moving their headquarters to the two buildings include biopharmaceutical company Avanir Pharmaceuticals Inc., fleet management software company Telogis Inc., information technology services firm UST Global Inc. and restaurant chain Johnny Rockets Group Inc.

Avanir, UST Global and Telogis moved to 20 Enterprise from other Aliso Viejo offices, while Johnny Rockets came from Lake Forest.

Santa Clara-based Marvell Semiconductor is in the process of adding 15,000 square feet of space at 30 Enterprise, bringing its total there to about 37,000 square feet.

Rochester, N.Y.-based Bausch & Lomb, one of the new building's first tenants, has grown in similar fashion, from an initial 24,600 square feet to about 60,600 square feet, also at 30 Enterprise.

Aliso Viejo expansions are a good sign for the area's job market, as well as a validation of the Summit's emphasis on employee amenities, environmentally friendly design and collaborative office spaces, Russ Parker said.

"We think we've put the dollars where you can see them," Parker said of the company's latest offices.

The two new buildings now count a vacancy rate of about 6%.

Aliso Viejo's office market, which runs about 3.1 million square feet, now counts vacancy rates of about 16.5%. That's roughly the same rate seen for the entire county, according to area brokerage data.

History

Parker Properties has been Aliso Viejo's largest commercial developer throughout the past 15 years. It opened the two four-story buildings, totaling about 260,000 square feet, in 2008, just as the area's office market began showing signs of weakness.

The buildings were the largest speculative offices built in South Orange County during the last commercial real estate boom.

They were also built around the same time that Parker Properties put up an eight-story office at the Summit for Newport Beach-based Pacific Life Insurance Co., and a new Renaissance ClubSport, a combination boutique hotel and sports club, opened on the campus.

At the end of last year, 20 and 30 Enterprise were still less than half full.

The slow leasing market also had an affect on 15 Enterprise and 25 Enterprise, two nearby offices at the Summit that Parker Properties developed and ran for RREEF America LLC, a real estate investment unit of Deutsche Bank AG in Germany.

The 15 and 25 Enterprise offices, which include the local operations for Miami-based homebuilder Lennar Corp., went back to the lender early last year. Brokerage officials and other sources expect the two offices, totaling about 300,000 square feet of office space, to be sold later this year.

Parker Properties also partnered with RREEF on the latest office project; Redmond said the new latest buildings aren't in financial difficulty. The developer and its financial partner reworked loans tied to the projects.

Patriarch's Passing

Along with leasing and financial challenges, Parker Properties felt the death of chairman John Parker, who suffered a stroke in late November. He was 83.

John Parker was considered one of the fathers of commercial real estate in Orange County.

Russ Parker said the company's recent success with leasing this year was a matter taking the initiative of reaching out to a number of prospective tenants, something he learned from his father.

"He would have hated it if we were just reacting" to the down market, Russ Parker said.

Among future projects the company is considering is a 10-acre site next to the Pacific Life office, which is being eyed as a potential 200,000-square-foot office that likely would be the last major development at the Summit.

Redmond said the developer is looking to do a build-to-suit project for that site.

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