Versata Pays $4M to Save $8M in Lease Cost

OAKLAND, CA-Versata Inc. is paying about $4.3 million in cash and stock in order to reduce by $8 million its overall lease obligation at the Kaiser Center building, a 28-story office tower adjacent Lake Merritt at 300 Lakeside Dr. The software maker inked an eight-year lease shortly after it went public in 2000 and, as a result, was paying an above-market rent of $39 per sf, according to lease documents filed with the SEC.

The software maker leases three floors in the middle of the building totaling 75,000 sf; however, a new lease amendment reduces the company’s commitment to 25,144 sf and extends its commitment for that reduced obligation by two years to Aug. 31, 2010. Over the term of the amended lease, its lease rate will ramp from about $29 per sf to $39 per sf.

Versata says the change reduces its obligation over the life of the lease by $8 million and its 2004 lease payments by $2 million. In exchange, the landlord, then Kaiser Aluminum and now Summit Commercial Properties, will drain the company’s $4.8-million letter of credit by $4.2 million and also receive 50,000 shares of Versata common stock, which last traded for $1.70 per share.