Qualcomm Fills 68,000-SF Project

SORRENTO MESA, CA-After being built in 2001 a vacant building finally has a tenant lined up for occupancy. Qualcomm Inc. has agreed to fill all of the 67,995-sf property at 5717 Pacific Center Blvd.Qualcomm signed a 10-year lease for an undisclosed amount on the Kilroy Realty Corp. property. A report from CB Richard Ellis reveals that the two-story facility had an asking rate of $2.95/sf triple net, with a $100/sf TI allowance.Qualcomm plans to fill the vacant building in December and use it for office and R&D space, but the company might be hard pressed to meet that tight schedule, according to Robert Merkin, one of the brokers who worked on the deal. “It’s a shell right now,” Merkin tells Globest.comMerkin, Richard Sparks and Jerry Keeney all of CB Richard Ellis, represented Kilroy. Doug Lozier, also of CB Richard Ellis, represented Qualcomm.In January 2001, telecommunications supplier Ericsson signed a seven-year lease for the space, but never moved in. The firm would later terminate the lease with a buy-out, according to Merkin.The property sat vacant all this time, with brokers marketing the space, primarily, to biotech firms. But that industry’s problems held back activity. “The biotech market has had funding problems and received bad news on certain drugs,” Merkin says. He adds that the industry’s problems could hold for at least another year.The opposite is true for Qualcomm. The firm is flush with cash–sales are expected to hit $6 billion for the fiscal year ending in September, according to company reports.The wireless technology giant is putting that money to good use and is on a buying spree of late. In recent weeks it paid $600 million for Flarion, a US-based wireless network technology company and $57 million for British-based wireless startup Elata. Qualcomm is targeting more companies to take over before year’s end.All that growth allows the company a greater need for more space, but Merkin says he doesn’t know where the personnel will come from to fill the Pacific Center space. “Qualcomm has its corporate headquarters across the street and this latest lease will give them more than 1.3 million sf in the submarket,” he says. “Some of it could come from growth or from consolidations.”