Corporate Moves Opening Up Office Space

Within a week, Orange County’s office market has been dealt a double blow. Two major companies, Avco Financial Services and Rockwell International Corp., headquartered in the same Costa Mesa project, have announced plans to move out of state.

Left behind will be roughly 170,000 square feet in Plaza Tower, developed by C.J. Segerstrom & Sons, across the street from one of the developer’s other major holdings, South Coast Plaza. Even more space will open up elsewhere when several other large employers move to other parts of the county or leave the market altogether.

When Grubb & Ellis, one of the region’s largest brokerages, produced its annual market forecast last week, the firm predicted vacancy rates would edge upward as a flood of new space becomes available. About 1.5 million square feet of new offices will be added to the market next year, roughly six buildings the size of Taco Bell’s headquarters in Irvine.

Although the brokerage factored in several firms that are changing sites, there will be a larger void now, making it harder to fill the space, said George Economos, senior vice president at Grubb & Ellis.

“It will take a brisk year to achieve our projection,” Economos said. “You have to make up your losses, and it will be a tough year for that reason.”