Law Firm Inks 115,000-SF Lease at One Market

SAN FRANCISCO-Sedgwick, Detert, Moran & Arnold LLP signed a long-term lease for 115,394 sf at Equity Office Properties’ One Market, a two building, 1.5-million-sf class A office development in the Financial District. The law firm will relocate from Boston Properties’ One Embarcadero Center in April 2005.Sedgwick is taking 51,785 sf directly from EOP and is subleasing the remaining 63,609 sf from the Clifford Chance law firm, 16,000 sf of which is a sublease from the Wilson Sosoni law firm. The direct space is on the 10th floor of Spear Tower and the fifth floor of Steuart Tower. The sublease space is on the sixth, seventh and eighth floors of Steuart Tower. Generally speaking, the leases, including renewal options run through 2018. The deal with Clifford Chance, which improved its space one year ago, includes all furniture, fixtures and equipment.Although the negotiated lease rates are not being revealed, Sedgwick Partner Bruce Wold tells GlobeSt.com that the four-party transaction–a direct lease, a sublease and sub-sublease–will “generate substantiantial savings compared to what it would have cost us to stay at One Embarcadero Center” for the same period of time, notwithstanding the fact that the law firm will be leaving One Embarcadero Center a full year before its lease there expires. As an example, a $10 per sf discount compared to One Embarcadero Center would save the firm more than $1.1 million per year in lease costs.”The combination of circumstances of the various parties along with the understanding that [our] lease doesn’t expire until 2006 provided enough incentive to everybody to make it work for us,” says Wold. “The word that both Clifford and Wilson adopted regarding our timing was ‘fortuitous’.”Sedgwick’s broker in the deal, a Staubach team led by senior vice president Kevin Brennan, put the lease rate in stronger–if not more specific–terms. “Nobody could compete with the blended rate,” Brennan tells GlobeSt.com. “It was essentially impossible for any class A landlord to even come close; there was too much high-end residual value in the [Clifford Chance] space.”Sedgwick leases 107,000 sf at Embarcadero Center. The lease started out at 100,000 sf and “somehow grew during the term” by 7% due to new BOMA standards, says Wold. With its lease there expiring in 2006, Sedgwick was on the lookout for a good deal. “We were in communication with [Clifford Chance] within a few days of the announcement of the closing of their San Francisco office,” he says. “We found out that what they had and we needed was consistent if we could get additional space” directly from EOP. The complex transaction was brokered for Sedgwick in just four weeks by a Staubach leasing team headed by senior vice president Kevin Brennan. Brennan was unavailable for comment, but Wold was quick to give credit to the team for pulling all the parties together, compiling all the necessary legal documents, such as non-disturbance agreements, and making the varying leases co-terminus.”To get it all done within 30 days was a phenomenal effort on the part of everyone involved,” says Wold. “We accomplished in 30 days what would normally take three or four months to accomplish.”