Another tenant, Verdon & Associates, a law firm that handles estates and trusts litigation for high net worth families and corporations, says it was the location, along with the service that got them in the 620 Building at Newport Center.
     "We took a survey of the market," says Ted Verdon, the firm's CFO. "We wanted to see what would work for us and we wanted to be here in Newport."
     Within 24 hours, The Irvine Co. had a design plan in blueprint form, according to Verdon.
     "They run it like a really good business," Verdon says.
     Different tenants have different sets of needs, according to Sim, and what's important to tenants changes from year to year.
     "One year, it was not enough ATM machines. The next year, tenants said they needed more food choices," Sim says.
     She says there's something more about the workplace that makes it all the more important.
     "These are little mini-cities," Sim says. "We spend more time here than anywhere else."
     While one half of the equation involves the face-to-face customer commitment, the other half means providing the top physical attributes to the property that are possible. That means maintaining the property to its highest standards, according to Halford.
     "Our view is always about the long-term, we’re not a seller of properties. We’re not a pruner of properties,” says Halford. “We always want the highest quality within the structure. We want top quality within their product type.”
     Halford says there’s a common recipe to success for the company—highest quality, location, landscape, physical building and customer services. And, he says that product positioning is among the keys to success in the marketplace.
     “In tougher economic times, landlords typically go the other way and pull back from putting more money into the property, but we’re bucking the trend,” says Halford. “Most of our competition is keeping the building as is, not putting more dollars into the product.”
     At the very least, according to Halford, they want to save capital.      “If leasing drops, the last thing to do for many businesses, is to spend more money,” Halford says. “But we want to maintain an image that whether we’re looking at good or bad markets, we’re going to maintain a quality that is high.”

     He uses two disparate examples of recent makeovers in the office portfolio. In the first, The Irvine Co. bought Fox Plaza, in Los Angeles, three years ago, and promptly put more than $1 million into the lobby area.
     In Silicon Valley, The Irvine Co. bought into the market there, even while times had hit bottom after the tech crash. Again, it’s a long-term buy for The Irvine Co. Although the improvements have take place, there’s not been significant deals going on, and that’s okay, for now.
     “Our goal was to implement improvement—prepare it for when the market returned,” Halford says.
     So, how did the reinvestment program take flight? According to Halford, it was a team effort.
     “We took architects, landscapers, property managers, leasing agents, interior designers, and had them crawl all over the properties,” Halford says “Usually, this will be like sausage being manufactured—a recipe for disaster, where you expect to wind up with purple carpet with green flowers, but that wasn’t the case.”
     Currently, work is wrapping on the class A office towers at Newport Center, according to Scott McRobbie, senior director, project management, with the Irvine Co.’s investment properties group.
     “We have tried to update the buildings however possible—from wall surfacing and carpeting, to re-tinting the windows, painting and landscaping. The work appears to be paying off. Even in the so-called down market, Newport Center is now leasing at roughly 93 percent.
     According to Val Wheeler, SVP of asset management, the reinvestment program wasn’t about “before” and “after” shots. Wheeler joined the company in July of 2003 after a background primarily with REITs.
     “A lot of real estate people believe a long-term hold is 5-7 years. For the Irvine Co., we hold buildings over the really long term,” says Wheeler.
     The key, he says, is keeping tenants you’ve already got under roof rather than turning around to sign the next lease.
     However, no matter what else you talk about concerning commercial real estate, talk eventually comes back to the mantra—location, location, location—and that’s one area that gives the Irvine Co. a certain built-in advantage, according to industry veteran George

Sprucing Up THE IRVINE CO. OFFICE PROPERTIES Division includes about 1,600 tenants and holds some 400 properties in its portfolio. This list includes office, flex/campus, manufacturing, industrial and mid-tech tenants. The Office Properties group has embarked on a three-year, $45-million reinvestment program that totals 28 properties and 75 buildings.       Among the main properties in the reinvestment program are: 610, 620 and 660 Newport Center Drive - Newport Beach Jamboree Center - Irvine MacArthur Court - Newport Beach Westwood Gateway - West Los Angeles Fox Plaza - Culver City Symphony Towers - San Diego La Jolla Gateway - La Jolla

Economos, a broker in the NAI Capital Commercial Newport Beach office. “They dominate certain areas in Orange County, like Newport Center and the Spectrum,” says Economos. “That allows them the ability to control the market, so to speak.”
     Orange County's commercial real estate market, meanwhile, still holds an allure to those working and depending upon it. But questions abound over where interest rates will go and whether the job market will ever take off again.
     There’s a belief that rental rates that have been flat and are at or near bottom also will rise quickly if the hoped-for jobs materialize and drive demand for space, especially in the office market.
     One possible impact of rising interest rates might be consolidation in the mortgage industry if rising rates reduce mortgage originations and cause consolidation in that industry. There has been speculation that such consolidation could hurt the county's office market, where mortgage firms have expanded substantially during the low-interest-rate environment. But Halford says that concern about consolidations in the mortgage industry has been "overplayed." If conditions do change and mortgage firms need less space, Halford says, it will occur at the same time as other companies expand to fill the space.
     And it’s a good bet that the Irvine Co. will have the right space to fill it. —SOCAL