In January, Steve Salyer, real estate manager for the DoGA, told GlobeSt.com that BofA's proposal had been selected as the front runner of 15 submitted to the agency, which negotiates leases on behalf of various state departments. A letter of intent was signed shortly thereafter. The lease was finalized late last month.
The AG's office is currently housed in about 98,000 sf at 900 Fourth Ave. The building is owned by Boston-based Beacon Capital and better known as the Union Bank of California Center. The sublease agreement for 800 Fifth Ave., which is owned by Texas-based Hines GS Properties Inc., will save the AG's Office $105,000 per month when compared to the existing lease, according to the DoGA.
The AG's office will occupy floors 18 through 22 in the 42-story Bank of America Fifth Avenue Plaza beginning in June. The lease officially commences July 1, 2007, when the AG's existing lease expires. However, BofA is letting the AG's Office occupy the space in August 2006 at no charge and not making them pay rent until six months after the lease officially commences.
In addition to the free rent, the bank is picking up all tenant improvement costs, making an additional cash payment to the state and providing discounted parking spaces. Not accounting for the concessions, the $27.5-million lease deal equates to an average annual lease cost of $23.91 per sf.
The tenant improvement allowance was not specified, but is believed to be between $5.2 million and $6.4 million, or between $45 and $55 per sf. The early occupancy and free rent, if based on the average lease rate on the deal, is worth about $4 million. The additional cash payment ot the state is $533,000, or $4.50 per sf. The parking discount is about $300,000, or $50 per month per stall for 50 stalls.
The bank was represented in the sublease negotiation by Don Schulz in the Seattle office of Jones Lang LaSalle. Schultz is marketing an additional 115,000 sf in the building on behalf of the bank. The available sublease space is on floors 25-30. The asking full-service lease rate is $22-$30 per sf, according to officespace.com. Another 35,000 sf is being marketed directly by building ownership at similar asking rates.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
