Southern California’s Irvine Co. continues to expand its Silicon Valley office and apartment empire with the first 260 leases signed at its new Crescent Village Apartment Homes in North San Jose and another 240 completed apartments delivered a week ago and ready for occupancy.
The 1,750-unit development at River Oaks Parkway and Crescent Village Drive will be completed from now until July of next year and is a stone’s throw from Irvine’s other North First Street monster, the North Park Apartment Village, where it has 2,762 apartments in multiple developments.
In the next five years, Irvine hopes to double its more than 5,500 apartment count in the San Francisco Bay Area to more than 10,000 units, said Kevin Baldridge, president of Irvine Co. Apartment Communities.
At the same time, the company intends to expand its three-milion-square-foot office portfolio, after already doubling its workspace footprint in Silicon Valley in the last two years through new development and acquisitions.
The expansions will progress in tandem as part of a larger Irvine strategy to import its master-planned community approach to Silicon Valley and the Bay Area.
“We have been very successful with master planning in Southern California,” Baldridge said. “We see a lot of similarities between there and the Bay Area: the quality of life, the world-class universities, the high barriers to entry, the diversity of the job market and the economic vitality.”
The Irvine company is perhaps best-known as the development mastermind behind the City of Irvine, which the company master-planned beginning in the early 1960s using as its canvas a roughly 40,000-acre portion of the nearly 100,000-acre Irvine Ranch.
The approach emphasizes the balance among multiple, proximate uses including housing, work centers, schools, shopping, parks and open space. Fifty thousand acres of the orginal Irvine Ranch are preserved open space and parks, according to the company.
Obviously, much of the Bay Area does not offer vast swaths of undeveloped land for new master-planned development, but acquiring or developing apartments, shopping centers or offices in proximity to one another or to a park, for example, can create a similar effect, Irvine executives said.
Thus far, its investments have been limited to the South Bay, with the exception of one Redwood City apartment complex, but executives said the goal is to see that footprint expand. “The entirety of Northern California is interesting to us,” said Andrew Goodman, regional vice president of leasing in Silicon Valley for Irvine Co. Office Properties.
Baldridge and Goodman spoke to The Registry in an exclusive interview about The Irvine Co.’s plans for the Bay Area.
Irvine bought its first Silicon Valley offices in 1996 and developed its first Silicon Valley apartments, The Hamptons in Cupertino, in 1998. The 342-unit complex is adjacent to the site of Apple Inc.’s new headquarters campus.
Long-term, Irvine sees itself as a coastal California landlord and developer. It currently has 98 million square feet of commerical real estate including 490 office buildings, 41 retail centers, 125 apartment communities, three hotels, five marinas and three golf clubs, mostly in Orange County but also in Los Angeles, San Diego, Chicago and Silicon Valley.
Neither office nor apartment development or acquisitions will lead the company’s Bay Area investment progress, Goodman said, though the office company might cast a more covetous eye on an office project close to Irvine apartments.
A review of Irvine’s recent Silicon Valley investment activities gives a view of Irvine’s vision. In July, for instance, it acquired the six-building Silicon Valley Center at 2540-2590 N. First St. in San Jose, with approximately 440,000 square feet of offices. The project is about two miles south of the Crescent Village and North Park apartments.
Irvine’s Santa Clara Gateway development, with 911,000 square feet of offices, is under construction now. Dell Inc. has agreed to take one 150,000 square-foot building at the development in neighboring Santa Clara. The project is four miles from San Jose’s Crescent Village and North Park.
Meanwhile, lrvine is already advanced in the planning for two more North San Jose apartment developments with more than 1,700 units. It also recently acquired 32 acres in Santa Clara fronting U.S. 101 near Great America Parkway where it has rights to redevelop an existing low-rise office campus into not quite two million square feet of new office towers and 35,000 square feet of shop and retail space.
The so-called Augustine-Bowers site is two miles from Santa Clara Gateway. Irvine expects to begin development on not quite 500,000 square feet at Augustine Drive and Bowers Avenue in the second quarter of next year.
Irvine also owns a single Silicon Valley retail center, The Cherry Orchard Shopping Center in Sunnyvale, and hopes to expand its retail portfolio, as well.
The new tenants taking units at Crescent Park are much like those who live at North Park, Baldridge said: young technology-industry workers, the occasional financial services employee, typically single or married with no children. “Ocassionally we will get a couple with an infant, a small family,” he said.
Photographs courtesy of The Irvine Co.