Entrepreneurs ‘Leaving Garages,’ Seeking Additional Office SpaceREAL ESTATE: Some Firms Finding Spaces in Area’s Prime Submarkets Monday, April 16, 2012
A representative of ServiceNow, which recently filed paperwork for a planned initial public offering of stock for up to $150 million, referred questions on its relocation to its new landlord at UTC, Irvine Co. of Newport Beach.
John Turner, a San Diego regional vice president with Irvine Co., said ServiceNow had been looking for a place to relocate after outgrowing an office suite in Carmel Valley, and wanted additional space to accommodate future growth.
In mid-February, ServiceNow signed an eight-year lease to occupy the full building at 4810 Eastgate Mall, though financial terms are not being disclosed.
Turner said the signing reflects a general tightening of the UTC office market in the past year. For instance, Irvine Co.’s last available full-floor vacancy at UTC was recently filled by search marketing services provider Covario Inc.
More Confidence in Economy
“About 90 days ago, I could have pointed you to six full floors that were still available,”
“I think there is more confidence in the economy, and there are cases where you might see companies decide that when they do find a large enough space that suits them, they’re pulling the trigger now,” he added.
At the San Diego office of brokerage firm Jones Lang LaSalle, Executive Vice President Richard Gonor said there is now more activity among smaller office users than a year ago. Interest is tracking into the Class B marketplace, as firms shop locations vacated during the past two years while other companies moved to well located Class A sites.
Gonor said much of the leasing and shopping-around activity is being seen in sectors such as technology, health insurance, financial services and education.
“There are some submarkets where you’re seeing the landlords cutting back on the incentives, and rents are starting to rise,” he said, citing as examples the high-demand UTC, Sorrento Mesa and Mission Valley neighborhoods.