FDIC picks Irvine for temporary office site

The Federal Deposit Insurance Corp. has leased 200,000 square feet of space in Irvine for a temporary office that will manage receiverships and liquidate assets from failed financial institutions in the western United States.

The FDIC, which insures deposits at almost 8,500 U.S. banks and savings associations, leased the space at 40 Pacifica Place for three years, with options for two one-year extensions, the agency said Tuesday.

Regulators this year have closed the most banks since 1993, according to government statistics. The FDIC has participated in the seizure of three California institutions this year that by the agency’s estimates will cost the deposit insurance fund almost $9 billion.

The July failure of IndyMac Bancorp Inc. of Pasadena was among the biggest. The FDIC is running a successor bank.

Seattle-based Washington Mutual Bank was the largest U.S. bank to fail when regulators seized it in September and immediately sold it to JPMorgan Chase Inc.

The FDIC said last month that it was looking at locations across Southern California, including sites near Pasadena and in the Inland Empire, for its temporary office.

In choosing Irvine, the agency is benefiting from Orange County’s depressed office market, which has been hurt by the collapse in recent years of New Century Financial Corp., Ameriquest Mortgage Co. and other financial companies.

The office vacancy rate in Orange County soared to 17.4% in the third quarter from 12.1% a year earlier, while rents fell 4.4%, according to Cushman & Wakefield.

As many as 600 employees are expected to work in the FDIC’s new office.

The agency’s only other location for liquidating troubled assets is a permanent office in Dallas.