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Moody's KMV Inks 56,500-SF Lease at Foundry Square

SAN FRANCISCO-The financial software design subsidiary of Moody's Corp. signs a 10-year lease here for the third floor of the Orrick Building, a 10-story, 500,000-sf office building located at the corner of First and Howard streets.

By Brian K. Miller | Updated on January 27, 2005

SAN FRANCISCO-Moody’s KMV is consolidating its regional operations into the Orrick Building at Foundry Square. The financial software design subsidiary of Moody’s Corp. signed a 10-year lease for the 56,500-sf third floor of the 10-story, 500,000-sf building at the corner of First and Howard streets in the South-of-Market district.Moody’s KVM currently occupies two buildings, 1620 Montgomery in San Francisco and 1350 Treat Blvd. in Walnut Creek. The move should occur by September. Robert Larscheid and Jeffrey Tremolada of the locally based corporate real estate firm Axiant Group represented Moody’s KVM in the lease transaction. Building owner Equity Office Properties was represented in-house by Kenneth Churich.The two-year-old building’s anchor tenant is Orrick, Herrington and Suttclife LLP, the city’s oldest law firm. According to Equity SVP Mark Geisreiter, the new lease will bring the occupancy at the building up to 71%. The Orrick Building “is more like suburban campus in Downtown San Francisco,” says Larscheid, explaining that EOP was the only owner who could accommodate his client’s requirement on a single floor. “I think that’s why a lot of its tenants migrated from traditional financial district locations; the operational efficiency is just great.”The building’s third floor has never been occupied. The law firm’s build out will be paid for in part with a $50-per-sf tenant improvement allowance from EOP, says Larscheid. The gross lease rate on the transaction is “well below $27 per sf,” he adds, and the lease agreement includes a termination right after the fifth year and an expansion right after the seventh year.The lease concessions are ones not commonly achieved by other than the highest-credit tenants. “Moody’s guaranteeing the lease was our negotiating hammer,” says Larscheid. “The creditworthiness of the tenant created the perfect storm.”

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