The San Jose-based company completed its acquisition of Webtrends in March and took over its seven-year, 58,000-sf lease in the new Fox Tower. With its growth rate having slowed along with the economy, however, the business management software maker hired Grubb & Ellis a few months back to begin marketing the 19,275-sf view floor it has never had the opportunity to improve or occupy.
Plenty of other business have cut back as well. The CBD witnessed 135,000 sq. ft. of negative absorption through midyear, and brokers say the situation hasn't improved in the third quarter. The most recent mid-year market report showed 1.4 million sf available in the CBD and an overall vacancy rate of 8.7%, a figure that many expect will hit double digits before the end of the year.
Meantime, another 475,000-sf of office space is headed to market. The biggest chunk is coming in the form of 1201 Lloyd, a 222,500-sf, mid-rise eastside office project by New York-based Insignia/ESG. The project is now six months from completion and still searching for its first tenant.
G&E broker Brandon Frank is marketing the NetIQ space with senior broker Dave Squire. Frank tells GlobeSt.com they were well down the road with a financial services firm that recently bowed because it wanted to avoid extra expenses given the state of the nation. "The news coming out is just not real positive right now," says Frank.
Still, adds Frank, there are deals to be had out there, and when a new user comes along the 15th floor of the Fox Tower will be one of the nicer full-floor options in the city. It's the first stop on the express elevator and the taker gets a $30 per sf tenant improvement allowance never used by NetIQ. "So we're hoping that if there's a full-floor deal to be had out there, we will get a good look," says Frank.
The space is being marketed at $19.75 per sf per year, triple net, which doesn't include about $7.25 per sf in expenses that would give it a full service rate of $27 per sf, or about $1.50 off listed rates for directly available space being marketed by Cushman & Wakefield. At the triple net rate of $19.75, a six-year lease deal for the full floor would be worth around $2 million to NetIQ, which has seen its share price fall from the triple digits to the low $20s.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
