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Marsh Megadeal Latest in String of Blockbuster Leases
San Francisco Business Times
05/11/07
After a slow start, 2007 is shaping up as the year of the supersized leasing deal.
On the heels of blockbuster agreements by Google and Babcock & Brown, Marsh & McLennan Cos. has signed a letter of intent to take 125,000 square feet at 345 California St., a block of space on the lower floors that Charles Schwab formerly occupied. If completed, the Marsh lease would be the fifth lease of more than 100,000 square feet in 2007 -- one more than was executed in all of 2006.
The biggest deal of the year -- both in terms of square footage and economic impact -- was Google's 210,000-square-foot sublease of Gap space at Hills Plaza's 345 Spear St. That was followed by Babcock & Brown's decision to move from Hills Plaza's 2 Harrison building to 155,000 square feet at Letterman Digital Arts Center in the Presidio. Other 100,000-square-foot-plus deals include United Healthcare’s 125,000-square-foot renewal at 425 Market St., and Bank of America’s 180,000-square-foot renewal in the Transamerica Pyramid.
Now in 127,000 square feet at One California St., Marsh reportedly looked at One Front St. and Embarcadero Center, before landing at 345 California. Cushman & Wakefield represented both the landlord and tenant. Marsh was paying $36 a square foot and will pay between $40 and $43 a square foot at 345 California, according market sources. The average asking rate in the central business district is $45.60, a 15 percent increase over the end of 2006.
PMI Properties’ S.F. acquisitions on a roll
Los Angeles-based PMI Properties has added to its San Francisco portfolio, grabbing 539 Bryant St. for $14.9 million.
The deal is the latest in a string of bets PMI has placed on buildings perfectly placed to capitalize on the city's Web 2.0-fueled recovery. With 55,000 square feet and ample parking, the Bryant Street property brought in $271 a square foot.
Chris Economou and Mark Mason of Marcus & Millichap represented both the buyer and the seller.
In the past six months, PMI has acquired 410 Townsend St. and 394 Pacific St. and is close to grabbing another SoMa property.
"They look for recovering markets and their core is Los Angeles and San Francisco," said Economou. "They do creative office very well."
WR Hambrecht has its headquarters in 20,500 square feet on the ground floor of the building, but its lease expires at the end of 2007. Other tenants include Handheld Entertainment, Tech Solutions, and INgrooves.
Insurance firms grow into new financial district space
Two insurance companies – Majestic Insurance and Lockton Insurance -- have reached deals in the past week. Majestic, a worker's comp insurance provider, has leased the full 22nd floor of 101 California St. Majestic is now at 400 Second St., but has some workers in another location as well. Lockton Insurance, will expand into the entire 17th floor of 2 Embarcadero Center. The 25,100-square-foot lease represents a 50 percent increase for Lockton, the largest independently owned brokerage in the country. John Chamberlain of NAI BT Commercial represented the tenant in both deals.’
EOP vet lands at Jones Lang LaSalle
Another member of the Equity Office Properties brain trust has landed a new gig. Todd Robinette, a managing director on EOP's management and operations operation, has joined Jones Lang LaSalle. Robinette will be JLL's senior vice president for property management operations.
At EOP, Robinette was responsible for property management and operations at 15 Class A office buildings totaling 5.7 million square feet.
Sam Zell's EOP was acquired by the Blackstone Group in a $39 billion leveraged buyout, the largest ever. The San Francisco portion of that portfolio was then snapped up by Morgan Stanley, which has tapped brokers from JLL and CB Richard Ellis to handle leasing and management. The Business Times reported last week that Mark Geisreiter, EOP's top Northern California executive, had signed on with Panattoni Development Co.
Robinette is the sixth high-profile addition to Jones Lang LaSalle's Northern California operation since the start of the year, and more are on the way, according to Elizabeth Hearle, managing director of California operations.
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