There's been an encouraging dialogue surrounding the potential transformation of empty high-rise office towers into additional housing, and it's worth extending this conversation to include low-slung office parks.
The real estate giant, Irvine Co., has already received approval from the city of Irvine to commence planning for apartments at three sites of undeveloped land initially earmarked for low-rise commercial use. In a positive stride, the company is now seeking approval for a fourth parcel.
Considering the changing demographics, this strategic move appears sensible. My analysis indicates that Orange County is grappling with a population decline over the past five years, losing a total of 51,000 residents. Simultaneously, the number of Orange County residents with jobs has decreased by 23,000. However, Orange County employers have added an impressive 73,000 positions in the same period, leading to questions about the whereabouts of these workers.
This disparity can be attributed to factors such as remote work and individuals with dual employment. Yet, a significant portion results from employers attracting workers from outside the county, contributing to daily traffic congestion on local freeways and streets.
Expanding housing options could bring about more than just increased affordability; it has the potential to alleviate traffic congestion by reducing lengthy commutes. Local business leaders, who have long grappled with recruitment challenges due to expensive housing in Orange County, are now advocating for a return to offices. Shorter commutes for employees could play a crucial role in supporting this effort.
Irvine Co. sees the development of apartments as a strategic move to serve local corporations. Housing is perceived as equally essential as traditional office spaces, meeting rooms, and industrial facilities. Jeff Davis, a senior vice president at Irvine Co., emphasizes the importance of creating homes near job centers to retain top talent and bolster the city's economic strength.
An excellent example of this forward-thinking approach is Irvine Co.'s recent decision to plan up to 1,200 rentals on the last empty parcel at UCI Research Park at UC Irvine, originally zoned for an office building. This follows previous approvals for rental housing at three other Irvine sites tailored to corporate needs, including 1,459 rentals on 29 vacant acres and 896 units on 10 vacant acres. Additionally, Irvine Co. plans to donate 4 acres on Technology Drive for the construction of 320 affordable housing units.
Despite challenging times for many commercial property owners due to the shift towards remote work, Irvine Co. maintains that market dynamics are not the primary motivation for this housing initiative. The company's high leasing rate for its Orange County office portfolio, currently at 91%, further supports its diverse approach to real estate.
While most property owners specialize in one real estate niche, Irvine Co.'s broad portfolio enables flexibility and innovative thinking. This includes switching between commercial and residential uses for their land, as well as continuing the construction of new offices, exemplified by recent projects like Spectrum Terrace and Innovation Office Park.
In summary, as the traditional workplace undergoes a transformation, Irvine Co.'s adaptability shines through, with a commitment to meeting the evolving needs of the community and fostering a positive, dynamic environment in Orange County.
