Slide signed a five-and-a-half-year lease. The negotiated lease rate was not released by the parties involved but is believed to have come in at around $40 per sf. The asking lease rate for the upper floors of the building prior to lease negotiations was in the low $40s per sf per year, not including janitorial and utilities costs. The asking lease rate for the remaining space, floors 1 through 3, is in the high $30s per sf per year, including a $25 tenant improvement allowance.
Mike McCarthy and Carter Beim of Colliers International have the leasing assignment. Gary Arabian and Jenny Haeg of CAC Group represented Slide.Beim tells GlobeSt.com that there is lots of activity for the remaining space, including two tours today, each with a full floor user, as well as a gaming company that has expressed interest in two floors. Indeed, Colliers research finds there are currently 61 technology companies looking for space in the market, nearly 85% of which represent positive absorption.
"Despite some bankruptcies and additional sublease space coming on, the strong demand in the tech sector has kept us from experiencing the statistical changes happening in other markets around the country," he says. "As long as that sector keeps on kicking we will be fine."
Built in 1909 and renovated in 1989, 301 Brannan Street is located on the corner of Brannan Street and Second Street, one block from San Francisco's waterfront. The office space has exposed ceilings and exposed brick. In addition, the building is attractive because of its power and fiber optics infrastructure, which thanks to improvements made for Advent is some of the best in the submarket, according to local leasing brokers.
The building's has been substantially vacant for the past two years but the building owners have not been without rental income. Advent Software in 1992 signed a $20-million lease for all but the first floor of the building that expires in October 2008. It is currently paying approximately $36 per sf per year, according to its original lease agreement, despite vacating the space in October 2006 in favor of 95,000 sf lease at 600 Townsend St. at an average cost of $21 per sf, according to SEC filings. It now leases 155,000 sf at 600 Townsend.
Breevast BV acquired 301 Brannan as part of a three-building portfolio in late 2005. It paid $37.5 million for 301 Brannan, 139 Townsend St. (57,682 sf) and 345 Brannan (24,110 sf) and a parking lot. The portfolio was 92% leased at the time of sale. The seller was a JV of SKS Investments and ROK Properties.
Breevast let Advent off the hook for the final month's rent on one of the five floors in order to accommodate Slide. The top two floors are reportedly well built out by Advent while the fourth floor will require moderate renovations prior to occupancy, which will be phased in this fall.
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