Birtcher Finds First Tenant for Towers

Lakeshore Towers finally signed its first tenant after more than a year of serious searching.

Mission Energy Co., a subsidiary of Southern California Edison Corp., took three floors in the 18-story building near John Wayne Airport and moves in Jan. 1.

Laguna Niguel developer Birtcher, one of the building’s owners, valued the 11-year lease at $17 million.

Birtcher had been close to signing an even bigger, six-floor lease with a subsidiary of Japan’s giant Toshiba Corp. But that deal fell through in March when Toshiba decided to stay in Tustin and ride out the weak worldwide economy.

Because Birtcher had already cut Toshiba such a good deal on the rent, it couldn’t afford to offer another sweet deal to a second major tenant, the energy company Ultrasystems Inc. Ultrasystems decided to take four floors at a nearby high-rise after Birtcher passed it up as a tenant and before the Toshiba deal fell apart.

Mission Energy will move into 65,000 square feet in the first Lakeshore Towers building from a McDonnell Douglas Realty Co. building just down the street on Von Karman Avenue.

Mission Energy, which develops and operates power plants, said it picked the snazzy new Birtcher building because it was close to the airport and added to the company’s “corporate image.”

A second 18-story tower will be built later at the Lakeshore Towers project, but no construction date has been set. The local office market is overbuilt and runs a stubborn vacancy rate in the low 20% range, higher than the national average. Consequently, rents haven’t risen much in five years or so.

Meanwhile, the stream of tenants has slowed down, and construction of office towers has ground to a halt in the county.

The Lakeshore Towers project includes an eight-story parking structure, which is also completed, and a 10,000-square-foot restaurant now under construction called Il Fornaio.

The building is a joint venture between Birtcher and General Electric Investment Corp.