NEWS

Bren Rides Wave of Surging Commercial Real Estate Market

Bren Rides Wave of Surging Commercial Real Estate Market

Donald Bren

Donal BrenOwner, chairman, The Irvine Company

Estimated worth: $8.7 billion

No one benefited from the surging commercial real estate market last year more than Don Bren.

In the past year, Bren bought key office buildings in Orange County and San Diego, and is reported to have struck a deal in San Francisco. Locally, his company started building a handful of towers.

The moves—and a big jump in prices for office buildings—were a key driver in this year’s estimate for Bren. Our figure is 8% higher than last year, given an average 12% rise in office prices. We’ve factored in debt incurred in buys and construction costs.

Even so, our number still is conservative. An aggressive estimate easily could peg Bren at $10 billion or more. Either way, Bren is the richest real estate owner among the Forbes 400 (even by Forbes’ more conservative $5.7 billion estimate for him).

By our count, Bren’s more than three times wealthier than the other Donald, Donald Trump.

Just about all of Bren’s holdings rose in value in the past year.

Bren owns a lot—land, apartments, shopping centers, office buildings, hotels, golf courses, even marinas. Most of it is in OC, where The Irvine Company is the county’s biggest landowner and landlord.

His holdings also include office buildings and apartments in San Diego, Los Angeles and Silicon Valley.

Bren’s real estate empire is unrivaled for an individual in California, and perhaps the country.

The Irvine Co. owns more than 400 office buildings, 35 shopping centers and 80 apartment complexes.

Commercial real estate holdings span more than an estimated 30 million square feet of offices and shopping centers.

Among Bren’s holdings: parts of the 5,000-acre Irvine Spectrum and Newport Center, half of the 185-acre University Research Park next to the University of California, Irvine, and all of Fashion Island, Jamboree Center, MacArthur Court and the Island Hotel Newport Beach.

Rent from offices, apartments and shopping centers has been estimated at around $1.5 billion yearly. Land sales and development push annual revenue to an estimated $2.3 billion.

In recent years, land—or, more specifically, lots sold to homebuilders and commercial developers—drove increases in Bren’s estimated wealth. Land sales again factored into our number this year.

But Bren’s renewed interest in office buildings gained the most attention. Early this year, he spent close to $1 billion on OC and San Diego trophy towers.

And the company is said to be in escrow on a San Francisco tower that houses JP Morgan Chase. The reported price: $400 million.

Bren’s paid top dollar for all of his recent building buys, including close to $385 per square foot for Newport Beach’s Newport Gateway, a near record for the county. He paid a record-shattering $500 per square foot in San Diego.

The company says it got premium buildings that are nearly full at a time when rents are rising.

And Bren is building. The Irvine Co. is putting up the company’s first office towers in more than 15 years. In April, construction started on 20-40 Pacifica, twin 15-story towers next to Irvine Spectrum Center.

A fifth office building at the recently acquired Irvine Towers project is well under way. Another 12-story office building is planned at Jamboree Center nearby in Irvine.

Construction also continues for 700,000 square feet of buildings at University Research Park in Irvine for Broadcom Corp.

As for land, we figure the Irvine Co. could have 20,000 to 25,000 housing lots to sell or develop as apartments in the next couple decades.

The biggest remaining community development for Bren is the balance of Irvine’s Northern Sphere, which eventually could include 12,000 homes and apartments.

The company also is set to develop in East Orange and Anaheim Hills.

Bren’s undeveloped land is estimated at 25,000 acres in OC, though probably half of that is developable. He’s set aside more than half of the 93,000-acre Irvine Ranch as parks, trails and open space.

OC has been a big beneficiary of Bren’s wealth.

Most recently, Irvine schools got a $20 million gift. Bren gave the money to hire more teachers specializing in arts, music and science. He’s also given $1 million to the Think Together after school program in Santa Ana.

Last year, Bren pledged $20 million to support the Irvine Ranch Land Reserve Trust. In all, he’s given $50 million for conservation and to improve public access to the 50,000-acre land preserve that stretches from the hills to the Pacific Ocean.

In 2003, Bren gave $20 million to the University of California, Irvine’s computer school. He’s given about $42 million to UC Irvine in all, and has endowed more distinguished faculty chairs at the University of California than any other donor, earning him the University of California Presidential Medal in 2004.

—Mark Mueller