New Real Estate Buzz: Business Consolidation

New Real Estate Buzz: Business Consolidation

By DANIEL D. WILLIAMS

In the go-go days of the late 1990s, corporate expansions drove commercial real estate. These days, it’s corporate consolidations.






With plenty of cheap office and industrial space for the taking, companies with operations spread among several facilities are using the opportunity to group together call centers, manufacturing and other operations.






“Corporate consolidations are increasing in velocity as everyone is searching for ways to reduce expenses,” said Mike Parker, Western division president for Dallas-based Koll Development Co. “It is a single decision by management that can save millions of dollars in annual rent.”






There are other savings besides rent. Take security. Instead of having four security crews for four different facilities, companies can cut costs by moving to a single location with one security crew.






In the past year, Orange County has seen several consolidations, both in office and industrial space.






Earlier this year, Chicago-based insurer Aon Corp. consolidated four Costa Mesa offices at 1901 Main St. in Irvine’s airport area, taking 44,000 square feet with an option to expand to 66,000 square feet.






In July, Tyco International Ltd.’s AFC Cable Systems Inc. moved from multiple sites to 240,000 square feet of industrial space in Fullerton. It now shares space with another Tyco unit, Allied Tube