Under the terms of the agreement, all obligations for both parties will be terminated. Level 3 Communications will give Catellus an early termination payment equal to approximately 26 months of current rent. In exchange, it will be relieved of rent obligations for the remaining 19 years of the lease term.
A spokesperson for Catellus tells Globest.com that the lease was for two buildings totaling 165,000-sf. The first is a 65,000-sf data center and the other is 100,000-sf warehouse. Level 3 paid about $4 million in rent per year. Level 3 paid rent on the building from June 2001 through February of this year.
Catellus also will retain the tenant improvements Level 3 has made to the buildings, which it anticipates re-leasing as warehouse/distribution or research and development facilities. Level 3 made approximately $30 million in improvements to the data center.
``While we are disappointed to lose Level 3 as a tenant, I am very pleased that we were able to reach an agreement that meets both of our needs," says Nelson C. Rising, Chairman and Chief Executive Officer of Catellus. "Level 3 will be relieved of its obligations and we will retain the flexibility to re-lease the buildings to other tenants andto continue the development of Pacific Commons.''
During 2001, Catellus completed transactions establishing over $117 million of land value at Pacific Commons through sales, ground leases, and pre-leased development activities.
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