HR Answers Inc. upped its commitment from 8,000 sf to 12,500 sf and Healthco Information Systems Inc. increased the size of its lease from 2,400 sf to 8,380 sf, says Insignia/ESG Managing Director Coby Holley, who holds the leasing assignment for the park.
Both are relocating from their current locations in the park because those buildings couldn't accommodate their growth in contiguous space. The 42,000-sf building that will accommodate their growth was leased entirely by US Bank's equipment finance group, which moved to Tigard but was on the hook for rent through the end of this month. Holley tells GlobeSt.com that UBS Realty Investors let U.S. Bank out of its lease one month early in order to begin tenant improvements for HR Answers and Healthco.
The net effect of the expansions and the lease expiration is 32,000 sf of negative absorption for Southcenter, where vacancy is now around 13%. On the upside, Holley tells GlobeSt.com the absorption of another 10,000 sf of US Bank's former building will be announced in the next 10 days.
Holley declined to discuss the terms of the deal, but local brokers familiar with the market tell GlobeSt.com the effective rental rate was likely between $17- and $17.50 per sf per year, full service, not including concessions, which in this submarket now typically include a few months of free rent and a tenant improvement allowance in the $20-per-sf range.
HR Answers signed a six-year lease and Healthco signed a five-year lease. In March, Portland General Electric renewed a 14,997-sf lease at Southcenter for 10 years. The estimated $1.2-million lease is one of two commitments the power provider has at Southcenter. Combined, PGE leases about 29,000 sf at Southcenter, making it one of the largest tenants in the park.
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