In what will be a relocation from 577 Airport Blvd. in Burlingame, IBM signed a 10-year lease for the West Tower's entire fourth floor and a portion of the fifth floor. In May, Acxiom Corp. signed a long-term lease for the fourth floor in the East Tower. The asking triple net lease rate for the space as both deals were being hammered out was $2.95 per sf, assuming a $50-per-sf tenant improvement allowance.
Parkside Tower is located in the 1000 block of East Hillside Blvd. 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.
Sterling American Property, the real estate investment arm of New York Mets owner Fred Wilpon, used its fourth fund to acquire Parkside Towers and three other properties from Equity Office Properties in 2005 for $329 million. In the past six months, tenants have soaked up 200,000 sf at Parkside Towers. In addition to IBM and Acxiom, new tenants 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.
IBM will be the first tenant in the west tower of Parkside Towers, which has been in shell condition since its completion. IBM's lease commences in March 2008. The West Tower's sixth, seventh and eighth floors remain available along with the remainder of the fifth floor, for a total of about 115,000 sf. The space is not expected to remain available for long; it is one of the few options for a large contiguous block of space in the 3.5-million-sf Foster City office market, which according to the latest data from CAC Group has a vacancy rate of 5%.
C&C brokers Craig Kalinowski and Josh Rowell have the leasing assignment for the building. Kalinowski told GlobeSt.com in June that 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 said. "Users to the north are being pushed south by Genentech and Amgen and users to the south are being pushed north by Google."
In February, Intuit Inc. staked claim to a three-building, 210,000-sf campus in Menlo Park, leasing two of the three 70,000-sf buildings in a deal that includes rights to lease the third, according to the leasing agents, Howie Dallmar and Kevin Cunningham of Cornish & Carey. Located at 180 and 190 Jefferson Dr. near the western approach to the Dumbarton Bridge, the three-story buildings have been vacant for several years.
"Intuit had a group looking for a campus environment over more than 100,000 sf," Dallmar said. "They couldn't find space in Shoreline, where the group is currently housed, because it also home to Google, which has had a huge appetite for picking up space there, so they looked north and south."
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