Ask Jeeves Inks New, Smaller Lease at 555 City Center

OAKLAND, CA-Despite bad memories with the property, Ask Jeeves has found 555 City Center remains the best option for its bottom line and its employees. After inking a 10-year, $80-million lease for 160,000 sf in the class A office tower to kick off construction in 2000 and paying $16 million to terminate it two years later, the Internet company has inked a new 8.5-year, estimated $12- to $13-million lease for 55,803 sf on the lower levels of the 486,000-sf building.The company will relocate its headquarters to the Shorenstein-owned asset at the end of the year from 76,000 sf of leased space at Emery Station (5858 Horton) in Emeryville. Glen Sunnergren, the Ask Jeeves employee who headed up the effort, tells GlobeSt.com the company took advantage of the real estate market and the company’s increased business success in order to secure a location that it believes will help it attract and retain employees. “We believe we can shave 25 to 30 minutes off the commute of somebody who lives in south Bay,” says another company source. “And there are financial benefits; the lease rate is lower.”Ask Jeeves has leased the fourth and fifth floors at 555 City Center and a portion of the Plaza level that it will use for a server room and software labs. Neither side would discuss the lease rate, but brokers familiar with the market says deals in the building are being done at between $27 and $32 per sf per year, including a $50 per sf tenant improvement allowance. The $5 range in the lease rate is based on the size of the lease, the length of the commitment and the location within the building.When asked if he was confident Ask Jeeves would perform the second time around, Shorenstein’s VP of leasing John Dolby tells GlobeSt.com “we wouldn’t enter into a deal with any tenant if we didn’t think they could perform to the contractual arrangements of a lease.”In other 555 City Center leasing activity, medical software company Lumedx is leasing 5,755 sf on the 20th floor. The five-year lease commences Sept. 1, when the company will move from 2101 Webster Street in Oakland.Aegis Realty Partners in Oakland represented Ask Jeeves in its lease negotiations. Al Musante of Colliers International in Oakland represented Lumedx. John Dolby acted on behalf of Shorenstein Realty Services in both transactions.