Anduril Industries: Expanding Defense Technology in Orange County

In a noteworthy move amid evolving market conditions, Anduril Industries, led by tech visionary Palmer Luckey, continues to expand its footprint in Orange County. The defense technology company recently secured an additional 42,000 square feet for its operations, demonstrating its commitment to the region despite broader challenges in commercial real estate. This article explores Anduril’s growth trajectory, recent developments, and its strategic positioning within a struggling market.

A Flourishing Presence in Costa Mesa

In early August, Anduril Industries moved into 41,770 square feet at the Harbor Gateway Business Center, located at 3515 Harbor Boulevard in Costa Mesa. This lease extends until August 2030 at a rate of $22.68 per square foot (source: CoStar). With this acquisition, Anduril’s local real estate holdings exceed 1.3 million square feet, highlighting its commitment to the area as a principal research and development hub. The company has signed at least seven leases in the county since January 2024, further consolidating its operations near its 640,000-square-foot headquarters at The Press in Costa Mesa.

Shifting Market Conditions

Despite Anduril’s growth, the broader commercial real estate market in Orange County is showing signs of distress. According to CBRE’s second-quarter 2025 report, industrial vacancy rates are on the rise, climbing to 4.2%, with net absorption falling to a negative 71,869 square feet. The asking lease rates have also decreased, with a nearly 10% drop, indicating a need for market adjustment. Nonetheless, there are signs of potential recovery, particularly in logistics, driven by record container throughput at the Ports of Los Angeles and Long Beach, as cited by Cushman & Wakefield.

Resilience Amid Adversity

In contrast to the overall market, Anduril represents a rare bright spot, benefiting from increased defense spending and geopolitical tensions. Experts suggest that companies with robust fundamentals, such as Anduril, are capitalizing on attractive market conditions and identifying prime spaces for operations, despite increasing vacancy rates. Luckey’s company employs around 3,200 individuals locally, positioning it as Orange County’s second-largest aerospace employer after Boeing.

Strategic Investment and Future Growth

Anduril’s expansion is underpinned by a successful $2.5 billion Series G funding round in June, which boosted its valuation to $30.5 billion. This remarkable funding success follows a significant rise from $14 billion just a year ago. The influx of capital positions Anduril to secure over $6 billion in government contracts globally, with projected revenue nearing $1 billion in 2024. Recent contracts include a $159 million U.S. Army deal aimed at developing advanced night vision systems that integrate augmented reality and artificial intelligence.

Innovation and Modernization

Unlike traditional defense contractors such as Lockheed Martin, Anduril pioneers innovations like autonomous weapon systems driven by its proprietary Lattice AI software. Products such as Fury drones and Copperhead torpedoes underscore the company’s commitment to modern technology. Furthermore, Anduril’s strategic approach allows it to adapt quickly to market needs, distinguishing itself in a sector dominated by legacy firms.

A Broader Strategy and Future Vision

Anduril’s commitment to Orange County extends beyond its recent leases. The company plans to pursue an initial public offering (IPO), recognizing the necessity of scaling operations to capture significant defense contracts. The IPO comes at a time when the defense technology sector sees a surge in venture capital investment, making it a promising area for growth. The company’s geographic clustering strategy aims to leverage Orange County’s rich talent pool, especially among veterans seeking accessible job opportunities.

Conclusion

Anduril Industries exemplifies resilience in an uncertain commercial real estate landscape, showcasing how innovation-driven firms can thrive amidst challenges. With plans for further expansion and an eye on an IPO, Anduril underscores the potential for sustainable growth in defense technology, solidifying its position as a leader in the sector. As the market evolves, companies like Anduril will remain central to reshaping military capabilities through modern technology.

For more insights on commercial real estate and defense technology advancements, visit The Registry Southern California Real Estate News.