Anduril, the defense tech company started by virtual reality pioneer Palmer Luckey in 2016, is moving into a new corporate campus in Costa Mesa — in the shell of the former Orange County bureau and printing press of the Los Angeles Times.
The 640,000-square-foot transaction is one of the largest office leases in Orange County history, the real estate brokers involved said, and comes at a time when the region’s office rental market has finished one of its worst years since the Great Recession.
The complex, dubbed “the Press” by its developers, is owned by Invesco Real Estate, an Atlanta-based real estate investment manager, and San Francisco developer SteelWave. The Press is being developed by SteelWave and 5-Ronin, an Orange County development firm.
The owners prepared the Press to house multiple tenants, but Anduril snagged the whole former plant — and then some. In addition to all 450,000 square feet in the former Times complex, a new building of 190,000 square feet will be constructed just west of the existing structure to serve as the company’s research and development hub. A parking garage will also be added.
Anduril is not sharing financial details of the deal, but Matt Grimm, the company’s co-founder and chief operating officer, said that the new office “will be our home and headquarters here in Orange County for the next decade-plus.”
Grimm said that Anduril, which currently employs 400 at its headquarters in Irvine and satellite offices in Boston, Seattle, Washington and London, is on track to hit a head count of 700 by the end of 2021. It expects to have 1100 employees by the end of 2022 and keep growing at a similar clip into the future.
A rendering of the new headquarters of defense tech company Anduril, which is moving into the former Orange County office and printing plant of the L.A. Times.
(EYRC)
Fueling that growth has been a steady stream of major defense and border-security contracts.
In July, the Department of Homeland Security awarded Anduril a contract for as much as $250 million to expand its virtual border wall pilot program, which links a series of electronics-packed sensor towers and lightweight drones along the U.S.-Mexico border via powerful artificial intelligence software that simplifies surveillance. The company landed an even larger contract with the Air Force, for as much as $950 million, in September, after demonstrating that the company’s software could use sensors and drones to autonomously detect and react to a simulated threat.
And at a time when many companies are shutting down their offices and hiring new employees to work remotely, Grimm said that Anduril’s business requires a physical location.
“Big portions of what we do make it literally impossible to go to a full remote workforce,” Grimm said. The hardware engineers building drones and surveillance equipment need to work with industrial machinery on-site, work on classified contracts needs to be conducted securely, and potential customers need to check out Anduril’s products in person, he said.
Despite the company’s well-publicized ties to the Trump administration — chief executive and co-founder Luckey hosted a fundraiser for the former president in October, and multiple co-founders came from businesses founded with prominent Trump backer Peter Thiel — Grimm is confident that the military money will keep coming in during the Biden administration.
“It’s not as if a new administration comes in, and they say ‘let’s not invest in the future, and instead build more tanks,’” Grimm said. He expects that Anduril’s growing record of delivering on large contracts will bring in new business, and notes that the Biden administration has indicated in policy statements that it plans to invest in more “flexible solutions and technologies” along the U.S.-Mexico border.
A rendering of the new headquarters of defense tech company Anduril, which is moving into the former Orange County office and printing plant of the L.A. Times.
(EYRC)
The office lease is the largest in the last 15 years in Orange County in size, according to real estate brokerage Newmark Knight Frank, and the largest ever in Costa Mesa.
Orange County is known for its conservatively designed, suburban-style office parks, but tech companies in the region have been looking for something more dramatic.
“Orange County has historically been a commodity-driven office market that many people might describe as architecturally uninspiring,” said real estate broker Jay Nugent of Newmark, who helped arrange the lease.
Big historical properties converted to offices in the Los Angeles area include the former hangar in Playa Vista where aviator Howard Hughes built his Spruce Goose aircraft in the 1940s, which is occupied by Google. Last month Beyond Meat Inc., a producer of plant-based meat substitutes, agreed to rent a 280,000-square-foot former airplane manufacturing plant completed in 1930 in El Segundo that is being converted to offices.
As a former printing and distribution hub for The Times, the Press complex includes a defunct rail spur and on-site gas station. Grimm said that the rail line is being converted to a park for employees, and the gas station will become the site of the campus’ coffee shop.
The Press will have “finishes similar to what you see in Silicon Beach or Santa Monica,” broker George Thompson of Newmark said. “It’s unique in Orange County.”
SteelWave and Invesco bought the Press site and an adjacent parcel on Harbor Boulevard from Tribune Real Estate Holdings and Kearney Real Estate Co. in 2017 for $65 million. Tribune Real Estate is a subsidiary of Tribune Media Co., former owner of The Times.
The new owners dubbed it the Press, a name that plays off the property’s history as a newsroom and printing plant beginning in 1968. The makeover designed by EYRC Architects included the addition of two floors inside a portion of the high-ceilinged industrial building, while striving to keep “the grittiness and character” of the place intact, said Jonathan Hastanan, a managing director at SteelWave. The Press was intended to serve multiple tenants as small as 20,000 square feet, he said, until Anduril gobbled up the entire complex.
“We were never whale hunting,” Hastanan said. “This was a very nice surprise.”
The makeover, valued at well over $200 million, will be completed in phases, he said, with 44,000 square feet ready now and the new building for Anduril set for completion by the third quarter of next year. Grimm said that the company plans to move from its current office in Irvine in 18 to 22 months.