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Lease Up: Google Spears 243,000 SF in San Fran; and More Major Corporate Moves from July 14-18

Other Tenants Include: 3M, AMN Healthcare, Det Norske Veritas, DoD, Hortonworks, Imagine Communications, Michael Baker International, Nationbuilder, Room & Board, Sprouts, Targeted Metrics, TouchCommerce, Varonis Systems, Weber-Stephen and WellCare Health Plans
July 18, 2014

Google Leases 240,000+ SF in San Francisco

By John Walz
Google (NYSE: GOOG) signed a lease deal for 242,640 square feet in the Spear Street Tower in San Francisco, CA.

The Plaza includes the 42-story Spear Tower, the 27-story Steuart Tower and a six-story office annex and retail space for a total of 1,458,808 rentable square feet.

Located at 1 Market St., Spear Street Tower is a LEED Gold-certified, Class A trophy high-rise constructed in 1976 in San Francisco’s south financial district. Anchored by Morgan, Lewis & Bockius, the complex is home to a world class tenant roster that also includes Regus, UBS, Schiff Hardin, Duane Morris and Visa.

Google’s lease includes floors 3, 4, 7-11, 13, 14, and 16.

Phil Tippett of CBRE represented Google in negotiations. Christopher Roeder, Wes Powell and Theodore Davies of JLL represented the landlord.

3M Getting Much Bigger Distro Center After Sale/Leaseback

By Justin Sumner
3M Company will nearly double the size of its Ontario, CA distribution center after securing a sale/leaseback arrangement for its current location and striking a build-to-suit deal with Trammell Crow Company for a new facility on an adjoining site.

3M sold the industrial building and vacant land at 5151 - 5153 E. Philadelphia St. to an investment group called Ontario Innovation Center II LLC for $31.91 million.

The 270,890-square-foot distribution building was constructed in 1990 on 24 acres in the Airport Area submarket of San Bernardino County. It has 47 loading docks and a 15-foot drive-in area.

Included in the sale was an adjacent 17.9-acre vacant lot. As part of the deal, 3M has signed a 10-year, 454,877-square-foot lease for a proposed new distribution facility to be built there. The project will break ground this month, with an anticipated completion date of May 2015. David Nazaryk of Trammell Crow Co. will oversee the development of the new facility.

The project team was headed by Doyle Shea, real estate manager for 3M Company. Gary Gregg, Mike Gordon, Ashley Snyder and Eric Walker with Cresa represented the seller. Sam Foster with JLL represented the buyer. Cresa Phoenix and JLL brokered the lease deal.

"This was a complex assignment, and we looked at multiple scenarios for accomplishing 3M’s goals," said Gregg, managing principal with Cresa Phoenix. "We were able to achieve extremely favorable economic terms for 3M while making sure they have a state-of-the-art distribution center."

Please see CoStar COMPS #3064641 for additional information on the sales transaction.

Room & Board Preleases 485,800 SF in Minneapolis

By Matthew Cook
Room & Board, a Minneapolis-based furniture retailer, has pre-leased 485,000 square feet in the Gateway North Business Center.

Located at 6601 NE Queens Ave. in Otsego, MN, the proposed 485,804-square-foot industrial building is expected to break ground in August, with an anticipated delivery date in early 2015. When completed, it will feature 50 loading docks and five drive-ins, 32-foot clear heights, and 50-foot column spacing on 21.5 acres in the Wright County Industrial submarket.

Dan Swartz of CBRE represented the landlord. Tom Hauschild and Dan Johnson of Tegra Group represented the tenant.

AMN Healthcare Renews 175,000-SF Lease in San Diego

By Adrian Robles
AMN Healthcare Services Inc. renewed its lease for 174,584 square feet at Del Mar Corporate Center III, at 12400 High Bluff Dr. in San Diego, CA.

The six-story, 208,464-square-foot, 4-Star office building was constructed in 2003 on 9.9 acres in the Del Mar Heights / Carmel Valley submarket of San Diego County. It features open spaces with 10-foot slab heights and 30-foot column spacing, a low 7.7% Core factor, a courtyard, fitness center, and building signage on a corner lot.

The deal, which is valued at $120 million, ensures that AMN’s 800 employees remain at the same location for years to come.

“In orchestrating the transaction well in advance of our client’s 2018 lease expiration, we were able to reduce AMN’s occupancy costs by $10 million while ensuring the company’s tenancy in a desirable and well-located building,” said Douglas Lozier, vice president at Savills Studley’s San Diego office. “We are appreciative of the opportunity to represent such an important San Diego tenant and create a real estate solution that meets the long-term needs of the company, its employees and its clients”.

Douglas Lozier of Savills Studley represented the tenant. The landlord, Kilroy Realty Corporation, handled the deal in-house.

U.S. Department of Defense Renews 606,000 SF at Hoffman Tower II

By Bryce Meyers
The U.S. General Services Administration (GSA), on behalf of the U.S. Department of Defense, signed a renewal to extend its lease at the Hoffman Tower II building in Alexandria, VA.

The renewal, signed for 606,575 square feet, is the largest lease signed in the Washington, D.C. market year-to-date and one of the top five lease deals signed in the region in the last five years.

Constructed at 200 Stovall St. within the Eisenhower Ave Corridor, Hoffman Tower II is part of the Hoffman Town Center, a 56-acre urban mixed-use development in central Alexandria. Developed by The Hoffman Co., the 12-story office property is situated adjacent to the Eisenhower Avenue Metro Station and within three blocks of the U.S. Federal District Courthouse.

The Department of Defense has occupied space at the site for more than 30 years, modernizing the building over time with renovations that include energy efficient upgrades.

The deal follows the National Science Foundation’s April acquisition of a 2.03-acre site that will house the NSF’s future 667,759-square-foot headquarters. The property is being developed as part of the Hoffman Town Center.

Additionally, the Class A Hoffman Tower I building recently underwent a multi-million dollar renovation to preserve the concrete structure while incorporating a brand new facade, renovated lobby, state-of-the-art HVAC system, fitness center and conference center.

“This state-of-the-art property is the newest product to come on line in Alexandria’s Carlyle area since the construction of 1701 Duke Street in 2010,” said Brendan Owen, chairman of the asset services group for Newmark Grubb Knight Frank (NGKF).

Owen and Scott Johnston of NGKF brokered the lease deal on behalf of the owner, The Hoffman Co. Henry Chapman of CBRE represented the U.S. Department of Defense.

Det Norske Veritas Expands Lease to 137,000 SF

Norway-based Det Norske Veritas (DNV) reached an agreement with Chambers Street Properties to expand the property it leases at 22535 Colonial Parkway in Katy, Texas, a suburb of Houston.

The two-story expansion, totaling 47,250 square feet, will increase the size of the existing office building to 137,000 square feet. Additionally, a new four-story parking deck will be built adjacent to the building.

The expansion will allow DNV to consolidate its operations and move 300 employees to the Katy property. Upon completion of the expansion, DNV’s lease will roll into a 10-year term for the entire property.

Chambers Street will oversee the general contracting services for the expansion project, which is expected to be completed by the summer of 2015. The expansion will be built to LEED Gold specifications and, like the existing property, will be ENERGY STAR certified.

WellCare Health Plans Relocating Regional Office re- from Long Beach to Cypress

WellCare Health Plans Inc. will relocate and consolidate from two locations in Long Beach, California (180 E. Ocean Blvd. and 211 Ocean Blvd.) to 10803 Hope St. in Cypress.

WellCare is exclusively represented in this move by a DTZ team led by senior vice president/managing director Dave Johnson, CCIM and associate vice president Liz Osborne based out of the Downtown Denver office. They were supported on the transaction by executive vice president Thomas Taylor and senior associate Anya Ostry in the Costa Mesa, CA office.

The team was tasked with identifying an optimal location for WellCare to consolidate its two local offices and relocate 200 employees. WellCare’s primary objective was linked to achieving cost savings and to maximize spatial efficiencies.

The DTZ team negotiated a lease for WellCare with Brian DeRevere of CBRE representing the landlord, Warland Investments Company. The agreement ensures that WellCare will have maximum flexibility, expansion rights, building signage and tenant improvements.

Michael Baker International Engineers Relocation to Downtown Pittsburgh

Michael Baker International will be moving its global corporate headquarters from Moon Township to downtown Pittsburgh.

The company has finalized a 10-year lease to occupy 22,000 square feet of high-profile space on the top two floors of the BNY Mellon Center, one of downtown’s most prominent and architecturally recognizable buildings.

The move is scheduled for December with executive leadership and 65 employees relocating to the BNY Mellon Building at 500 Grant St.

TouchCommerce Relocates, Expands Corporate HQs

TouchCommerce, an online customer acquisition and retention solutions firm, executed a new lease for a high-identity corporate headquarters building at 29903 Agoura Road in Agoura Hills, California.

TouchCommerce identified the 26,472-square-foot space and negotiated a plug-and-play lease transaction. The firm estimates that it will increase its 172-person staff in Agoura Hills by 20% by the end of the year.

Newmark Grubb Knight Frank (NGKF) team led by executive managing directors David Kluth and Josef Farrar represented TouchCommerce.

Hortonworks Fully Leases Stadium TechCenter Bldg

By Bryce Meyers
Hortonworks signed a lease deal to fully occupy a 65,000-square-foot office building positioned within the Stadium TechCenter campus in Santa Clara, CA.

A business computer software company and provider of enterprise Apache Hadoop, Hortonworks will relocate from its current operations in Palo Alto to its new, larger headquarters at 5470 Great America Pkwy. The move is slated for this fall.

Constructed in 1999, the property is currently undergoing renovations and formerly housed an office for computer networking company Arista Networks.

Stadium TechCenter is just off California Highway 237 - and one mile from the 49ers new stadium - in Northeast Santa Clara and consists of three existing buildings and one property currently in the development phase.

Conor Flannery and Bart Lammersen of JLL brokered the transaction on behalf of Hortonworks. Jeff Houston and Vincent Scott of CBRE, along with Steve Horton and Kelly Yoder of Cassidy Turley, negotiated on behalf of the owner, Spear Street Capital.

Sprouts Farmers Market Leases 77,000 SF in Phoenix

By Patrick Ashton
Sprouts Farmers Market, a grocery store company, will occupy 77,400 square feet of office space in addition to first-floor retail space in The Offices at High Street. The North Phoenix, AZ mixed-use development at High Street consists of several high-end office, retail, and multifamily buildings.

Sprouts will be moving from Paradise Village Office Park into its new headquarters location at 5455 E. High Street during spring 2015. The grocer will be joining other High Street office tenants such as Gigya, Alliance Financial Resources, and Nobis Technology Group.

Scott Maxwell of Cresa represented the tenant. John Bonnell, Brett Abramson, and Greg McMillan at JLL represented the landlord, ScanlanKemperBard Companies.

Targeted Metrics Leases 41,000 SF in Kansas City

By Hursh Vasant
Targeted Metrics, a sales information and management company, signed a three-year lease for 41,000 square feet in Eastbrook Park in Kansas City, MO.

The company is occupying space in two different buildings along Vivion Rd. in Kansas City's I-35 Corridor. The company plans on expanding into a grand total of 60,000 square feet.

Targeted Metrics is a fairly new company that chose Kansas City as its main corporate headquarters. The company will be hiring its entire staff locally.

Bob Campbell of Eastbrook Properties and Management represented the landlord.

Varonis Systems Signs Lease Deal for 46,000 SF

By Ashley D. Stockton
Varonis Systems Inc., a leading business technology firm specializing in software solutions has renewed its existing 15,356-square-foot lease on the 31st floor at 1250 Broadway. Additionally the tenant signed a 10-year lease for an additional 30,712 square feet on the 28th and 29th floors, for a total of 46,068 square feet there.

The 41-story, 718,481-square-foot, 4-Star office building was constructed in 1968 on almost one acre in the Penn Plaza / Garment District submarket of Manhattan, at the southeast corner of 32nd Street.

Justin Royce, Michael Blanchard, and Kelli Mekles with Cushman & Wakefield represented the landlord, Murray Hill Properties. Douglas Regal and Evan Algier with ABS Partners Real Estate LLC represented the tenant.

Nationbuilder Inks 10-Year Lease at Biltmore Court

By Keith Dornin
Nationbuilder, a local, home-grown tech company employing 120 employees, has leased 54,780 square feet of office space for 10 years at 520 S. Grand Ave. in Los Angeles, CA. The move is an expansion to its current offices.

The 12-story Biltmore Court office building totals 220,522 square feet. The property was built in 1923 and later renovated in 1987, in the Greater Downtown submarket of Los Angeles County.

This is the largest lease executed in the history of the Biltmore, and one of the largest office leases ever signed by a local technology start-up in Downtown.

Andrew Tashjian of CBRE represented the landlord, WHB Biltmore LLC. Dennis Smith and Griffin Farriss of Travers Realty Corporation represented the tenant.

Imagine Communications Subleases 36,314 SF

By April Cruse
Imagine Communications, a media software and networking solutions provider, subleased 36,314 square feet at 101 W. Colfax Ave. in Denver.

The 11-story building, which totals 320,463 square feet, was constructed in 2006 and is in the central business district.

Imagine Communications will move from the Meridian International Business Center to occupy the sixth floor of its building.

Patrick Bolick and Eric Carlbom of JLL represented the sublessor, The Denver Post.

Weber-Stephen Products Taps Duke Realty to Develop 757,120-SF Build-To-Suit in Huntley

By Bryce Meyers
Weber-Stephens Products LLC (Weber), a Palatine, IL-based manufacturer of charcoal, gas and electric grills and grilling accessories, selected Duke Realty to develop its 757,120-square-foot, build-to-suit bulk industrial facility adjacent to its manufacturing complex in Huntley, IL.

Situated on a 73-acre site, the new facility will allow Weber to consolidate its current U.S. warehouse operations into a centralized, national distribution center which will handle customer orders coming in from North America, Asia Pacific, South America, Europe and Africa.

"We are pleased to be selected by Weber-Stephen Products as the developer for its new, consolidated national distribution center," said Steve Schnur, senior vice president of Duke Realty’s Midwest region. "Our experience in constructing large, modern bulk warehouses will serve us well as we deliver a state-of-the-art building designed specifically for Weber’s inventory and pick and ship operations."

The facility will feature 32' clear heights, except in the perimeter bays, 52' x 50' bay spacing and a 7,000-square-foot office. In addition, three drive-in doors and 149 6' x 8' dock doors with 35,000 lb. hydraulic levelers will be incorporated into the structural precast panel building. On-site parking will consist of spaces for 157 cars and 193 trailer spaces, as well as two truck courts on the east and west sides of the building.

"Duke Realty offered the expertise we needed to not only construct our new distribution center, but also to complete due diligence on the land and negotiate its annexation with the Village of Huntley," said Dean Duffy, executive vice president of Weber's global supply chain. "All preliminary work has been successfully completed, and we are ready to begin construction.

Duke Realty closed on the site in May 2014, acquiring nearly 166 acres from Component Plastics for slightly less than $6.4 million. The building and remaining land can accommodate Weber’s future growth through a 405,600-square-foot expansion, which would bring the building’s total size to 1,162,720 square feet.

"Weber’s national distribution center will provide them with the space they need today, as well as the flexibility to grow their operations in the future," said Ryan O’Leary, vice president of leasing and development for Duke Realty. "It has been a pleasure to partner with Weber on a custom warehouse designed to enhance their distribution operations."

Noel Liston with Darwin Realty represented Weber in the transaction, while Ryan O’Leary represented Duke Realty in-house.

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