September 2nd, 2008
San Francisco Office Update: Symantec, Sports Basement, & Nokia all renew
It was a busy week heading into Labor Day as three solid San Francisco tenants all renewed their leases instead of taking new space. As reported by Ryan Munneke and Megan Gilmore from the Costar Group, Nokia, Symantec, and The Sports Basement chose to either exercise options, or renegotiate and expand within existing properties.
What this says about the marketplace is unclear because the negotiations and strategies are unknown at this point. It does however raise the conversation of the current cost of tenant improvements if and when tenants do choose to relocate to new buildings. Unless a new space lays out perfectly, tenants in today’s market are typically out of pocket on construction costs, as the amount being contributed by landlords does not cover the work needed.
We will discuss more about this in future postings, I will try to nail down some real numbers and report back. The important thing to take away from this line of thinking however is that when tenants pay for their own improvements, they typically consider the dollars spent a loan, and the monthly cost to service that loan is tacked onto rent and called “occupancy cost”. This allows for fair comparisons to alternative properties.
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Here are the three brief Costar articles:
Symantec leased 16,966 square feet on the fifth and eighth floors for six years at 303 2nd St. in San Francisco, where it already occupies 38,734 square feet. The Internet security company, which created the Norton Antivirus software, will take occupancy early next year. The eight-story office building delivered in 1988 and totals more than 730,000 square feet of office and retail space.
Nokia, the mobile communication company, renewed its 25,320-square-foot lease on the fifth floor of 650 Townsend St. in San Francisco. The company signed for an additional year. Delivered in 1990, the six-story office building has 710,400 square feet, plus a 12,000-square-foot atrium. Other tenants include Sega of America, Check Point Software Technologies, and SOMA Networks.
Sports Basement, a sports apparel retailer, renewed its 93,500-square-foot lease for five years at Presidio National Park Center in San Francisco. The company has fully occupied the building at 610 Mason St. since 2003. It has four stores in the Bay area: two in San Francisco, and one apiece in Sunnyvale and Walnut Creek.
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If there is anything I can do to help you as a Tenant Representative in the commercial real estate world, please do not hesitate to get in touch with me.
Thanks for visiting,
Tom Poser, Jones Lang LaSalle, San Francisco
www.sanfranciscotenantrep.com
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One Response to “San Francisco Office Update: Symantec, Sports Basement, & Nokia all renew”
[...] in the face of a U.S. economy sputtering along. We have previously reported on Xoom, Slide, Nokia, Symantec and others growing or recommitting to existing space South of Market. I will be reporting on the [...]