Xerox Corp. has acquired a 50% interest in Birtcher's $200-million high-rise office park being developed in Santa Ana in a cashless transaction in which the giant business machine company agreed to co-sign the construction loan and lease at least 125,000 square feet in the complex for 10 years.
Landing a long-term major tenant such as Xerox will help Birtcher, which is based in Laguna Niguel, lure other tenants to its office development, building industry specialists say. In the competitive commercial construction industry in Orange County, office vacancy rates are fast approaching 20%.
Officials of Xerox Realty Corp., the Xerox subsidiary that arranged the deal, said Wednesday in a press conference called by Birtcher that the company will consolidate its Western administrative offices at the business park, to be called Xerox Centre.
Brandy Birtcher, a partner in the family-run Birtcher development firm that will build the project on 4th Street at the intersection of the Costa Mesa and Santa Ana freeways, said at a press conference Wednesday that the 1.2-million-square-foot office complex will be developed over seven years on 10 acres Birtcher bought from Allstate Insurance Co. for $12.4 million in December.
Under current market conditions, Birtcher said, the first building, a 15-story, 300,000-square-foot tower, is expected to be ready in the spring of 1988; a 20-story 400,000-square-foot building is scheduled to open in the summer of 1989, followed by a 25-story, 500,000-square-foot building in the summer of 1992.
Original financing for the transaction was provided by Pittsburgh National Bank, Birtcher said, and long-term construction financing is being arranged with Toronto Dominion Bank.
Birtcher said that the property was in escrow when he learned that Xerox was looking for a Santa Ana location where it could consolidate its administrative services offices.
Xerox officials at the press conference said that the rent Xerox will pay at the park has not been decided.
Robert Moore, development director for Xerox Realty Corp., said Xerox plans initially to relocate 700 administrative workers from cramped quarters on McFadden Avenue in Santa Ana to the new location. Moore said that other Xerox operations scattered throughout Orange County also may move to the park.