Microsoft Lease Controversy Expanding

CAMBRIDGE, MA-Equity Office Properties’ troubles with its blockbuster lease with Microsoft Corp. at One Memorial Dr., are far from over, according to sources familiar with the negotiations. As GlobeSt.com reported last week, the process of freeing up 180,000 sf to accommodate Microsoft has fomented charges that certain tenant rights were not addressed by the subsidiary of the Blackstone Group of New York City.

The initial GlobeSt.com article indicated that tenant PA Consulting Group has an option for the top three floors of the 17-story tower, a clause that EOP allegedly neglected to address prior to signing Microsoft. The landlord is rumored to be working on a resolution that would include free rent and concessions approaching $10 million, if PA agrees to relocate to another EOP building. But sources tell GlobeSt.com that InterSystems Corp., a tenant of One Memorial Dr. since the prominent office tower opened in 1987, is also threatening legal action.

Not only does InterSystems supposedly hold the second option behind PA for floors 15 through 17, but source familiar with the negotiations explain that the firm had first-refusal rights on most of the other space leased to Microsoft, which inked a 10-year pact at rates said to exceed $70 per sf. One industry professional, also familiar with the negotiations, maintains that EOP considered neither the feelings nor legal rights of tenants who stood in the way of assembling the space needed for Microsoft.