The remaining availability, floors four through eight in the West Tower, have been in shell condition since the building was completed in 2002. The asking triple-net lease rate, raised about 30 days ago, now stands at $2.95 per sf per month, a price that includes a $50 per-sf tenant improvement allowance, says Kalinowski, who is marketing the space with fellow C&C broker Josh Rowell.
The complex was master leased prior to its 2002 completion by Inktomi, a data retrieval company. Inktomi never even began space planning before agreeing to pay $54 million later that year to terminate the $315-million lease obligation. In December of that year, Inktomi agreed to be acquired by Yahoo Inc. for $235 million.
The property owner is a 90-10 partnership of Sterling American Property Fund IV and Hines. Kalinowski says tenant interest in the complex has risen along with the biotech market locally and the centrally located mid-Peninsula is benefiting from a lack of availability further north in San Francisco and further south in the Silicon Valley.
"The life science industry in the Bay Area is very strong and the mid-Peninsula where this building is located in seeing a tremendous amount of activity," he says. "Users to the north are being pushed south by Genentech and Amgen and users to the south are being pushed north by Google."
Acxiom, however, is moving due east about four miles from San Mateo, where it leases 30,000 sf. The company chose the complex in part because it could put its entire requirement on one floor plate, Kalinowski says. Acxiom, which is being taken private in a $3-billion transaction with Silver Lake Partners and ValueAct Capital, is leasing east tower's the fourth floor; it expects to occupy the space in the third quarter of the year.
Headquartered in Little Rock, AR, Acxiom develops customer- and information-management systems. In addition to having the available space it needed to expand and remain on a single floor, Kalinowski says Axciom and others like the fact that they will be working with raw, heretofore unused space at Parkside Towers rather than inheriting an old floor plan.
The property, located off Highway 92 at 1001-1051 East Hillsdale Blvd. Other tenants who have signed on for space at Parkside in the last six months include Rearden Commerce (42,000 sf), Sling Media (25,000 sf) and Pacific Partners (18,500 sf). Konica Minolta also is a tenant in the building.
Sterling American Property Fund IV is sponsored by Sterling American Property Inc., the real estate investment arm of New York Mets owner Fred Wilpon. The fund acquired Parkside along with three other properties from Equity Office Properties in 2005 for $329 million. The other properties acquired were 301 Howard St. and Foundry Square II in San Francisco and San Rafael Corporate Center in San Rafael.
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