IRVINE COMPANY LOOKING TO BUY?

By Mark Mueller

Irvine Company has a new management team that could be readying a commercial real estate buying push.

Newport Beach-based Irvine Co.’s investment properties group, which oversees nearly 87 million square feet of commercial real estate, recently made official a number of changes to its upper management team.

Key among the moves was the formal addition of longtime real estate executive Ray Wirta, the former chief executive of Los Angeles-based CB Richard Ellis Group Inc. Wirta now serves as a senior adviser to Irvine Co. owner and Chairman Donald Bren.

Wirta, who also is chief executive of Newport Beach developer Koll Co. and plans to continue in that role, joined Irvine Co. as a consultant a few months ago in a move some company watchers thought might be temporary.

In addition, Irvine Co. investment properties group President Rick Gilchrist has been tasked with a new role heading up acquisitions.

The changes were formally announced this month in a memo from Bren’s office to senior executives.

Irvine Co.’s investment properties group oversees nearly 475 office buildings, 117 apartment complexes, 41 shopping centers, three hotels and marinas in Orange County, Los Angeles, San Diego and Silicon Valley.

The investment properties group’s run separately from Irvine Co.’s community development division, which heads up planning and development of housing projects on the historic Irvine Ranch.

That division is led by President Dan Young and has been the company’s busiest in the past year or so with projects in Irvine.

Bren, Wirta and Gilchrist now make up a management committee for the investment properties group.

Bren and Wirta, who’s in his mid-60s, will oversee operations.

Bren’s memo appears to solidify Wirta’s role at Irvine Co. He shares the same senior adviser title as longtime Bren confidant Clarence Barker, who now oversees development efforts for the apartment division.

Moves made since Wirta came aboard as an adviser include plans to consolidate legal and accounting functions of the group’s office and retail divisions.

Wirta headed up brokerage CB Richard Ellis from 1999 to 2005 and took on the chief executive role at Koll Co. late last year.

Gilchrist, who recently returned to work after heart surgery, will focus on acquisitions, according to the memo.

There are “significant acquisition opportunities that now exist in the commercial and multifamily real estate segments,” the memo said.

“We believe that there will be increasing opportunities in our markets that were not available over the last few years,” Gilchrist said in an e-mail to the Business Journal. “As a result, we are highly focused on identifying appropriate apartment and office projects that will enhance our existing portfolio of high quality, well located projects.”

If a renewed acquisition push plays out, it would be a shift for Irvine Co. The company’s stayed on the sidelines in the past few years as numerous properties—many of them financially distressed—traded hands in its key markets.

Gilchrist, a former chief executive at Maguire Properties Inc., joined Irvine Co. in 2006 in the midst of the company’s last office buying spree. Irvine Co. spent nearly $1 billion on office towers in OC and San Diego that year.

The pace of the company’s acquisitions slowed considerably after 2006.

Aside from a $1.4 billion apartment portfolio purchase in 2007, Irvine Co. has spent the past few years focusing on leasing up buildings it bought and built, along with managing existing buildings.

The company has seen high vacancy and others issues at La Jolla Executive Tower acquired in 2006, but none of its offices or apartments acquired near the market peak are believed to be in financial distress.

Whether the company goes after distressed buildings remains to be seen. Irvine Co. historically has paid top dollar for acquisitions, focusing on trophy buildings.

The company is rumored to be on a shortlist of potential buyers for Costa Mesa’s Pacific Arts Plaza office campus, home to law firm Rutan & Tucker LLP. The site also includes land for apartments and office development.

Irvine Co.’s name hasn’t come up in connection with another expected office sale, that of Irvine’s Quintana campus, formerly the local home of Washington Mutual Inc.

In Los Angeles, the most expensive downtown office building nearing a sale is believed to be the 40-story Union Bank Plaza, which traded hands in 2005 for $143 million.

Another Newport Beach investor, KBS Realty Advisors, is said to be the front runner to buy that building, according to reports.

Beyond that, they aren’t too many high-end offices on the market right now in Irvine Co.’s main markets, according to sources familiar with the company’s investment strategy.