San Jose, CA-based Cadence, which develops software for designing computer chips, pushed out its lease for 68,000 sf at the 120,000-sf Lakeview Plaza, situated at 4516 Seton Center Parkway in the far northwest submarket.
Jay Lamy and Chris Bachman, a Staubach Co. Central Texas team, negotiated on behalf of Cadence. The building is managed and leased by HUB Properties.
With the extension, Cadence takes advantage of the current weak real estate market in Austin to lock in a lower rate for several years, Lamy tells GlobeSt.com. "While it's a small amount in the bigger scheme of things, it reduces their immediate expenses," he says.
"That was one of the concerns of Cadence, being a public company," Lamy says. "They wanted to increase their EPS (earnings per share) as much as possible in the short term because that's what drives their market valuation."
Cadence had more than a year left on its lease at Lakeview Center, according to Lamy. He declined to be specific about the renewal's length, but did say it was more than two years and less than seven. Lamy says Staubach is working with several clients on similar deals.For the building owner, the renegotiation provides the security that the tenant will remain in the space beyond the current lease term.
The submarket's 33.6% vacancy rate is the highest in the Austin market. At last count, there was twice as much sublease space as direct lease space available in that area.
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