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Principal, Intel Cut Blend-and-Extend Deal at Amberglen

BEAVERTON, OR-The new owner of the 21-building, 1.2 million-sf business park acquaints itself with its highest profile tenant by way of a three-building, 170,000-sf lease renewal that extends Intel's presence in the office park into 2010 while lowering its lease rate.

By Brian K. Miller | Updated on May 03, 2005

BEAVERTON, OR-Intel has extended its 170,000-sf leasehold at Amberglen Business Center here out to 2010 in exchange for a lower lease rate, sources familiar with the transaction tell GlobeSt.com. The transaction was the first deal between Intel and Principal Financial Group, which acquired the 21 building, 1.2 million-sf business park last November for $114 million and is now trying to flip about 500,000 sf in seven buildings there for $60 million.In trade for extending its lease for three flex-office buildings even though only one was coming due this year, Principal essentially negated the annual rental increases that had occurred over the past several years, local industry sources tell GlobeSt.com. The transaction drops its triple-net rental rate from more than $1.00 per sf per month back to market, which is around $0.85 per sf, according to local sources. Keith Young of GVA Kidder Mathews represented Principal in the transaction and Brad Fletcher of Grubb & Ellis represented Intel. While neither confirming nor commenting on the specifics of the deal, both brokers tell GlobeSt.com the “blend-and-extend” transaction was a great opportunity for the new owner and its highest profile tenant to get to know one another. “We had one building coming up for renewal and we took the opportunity to bring two other buildings with more distant expirations into the mix, substantially improving our situation,” says Fletcher, who exclusively represents Intel in the region. “It was a good deal for everyone.”The Intel buildings are located at 10420 Von Neumann Dr. (62,981 sf), 1365 NW Amberglen Pkwy. (52,600 sf) and 1385 NW Amberglen Pkwy. (52,600-sf). They are not part of the portfolio offering by Principal, which GlobeSt.com reported on early last month</a. One of the buildings in the offering is owned by OHSU and being co-brokered by Cushman & Wakefield. Bids were due April 20.

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