Shorenstein Retains Tenants at City Center

OAKLAND, CA-Four office tenants at Oakland City Center recently inked deals with owner Shorenstein Properties, keeping occupancy above the market average. The 3.5-million-square-foot, multi-building office and retail development is located directly above the 12th Street Bay Area Rapid Transit Station in Downtown Oakland.

Itron, a purveyor of solid-state utility meters signed a direct lease for 23,134 square feet on the 18th floor of 1111 Broadway. The company has been subleasing the space for three years. The new lease commences on October 1, 2009 and will run for five years and four months.

Also at 1111 Broadway, Compass Lexecon, an economic consulting subsidiary of FTI Consulting is expanding its current space on the 15th floor. The firm has added 5,420 square feet to its current lease of 6,601 square feet. The newly expanded lease will run for five years and will begin April 1, 2009.

In the other two deals, Old Republic Exchange Co. renewed its 5,282-square-foot lease on the 19th floor of 555 12th Street for five years, and the law firm Siegel and Yee renewed its lease of 3,472 on the second floor of 499 14th Street for two years and expanded into an additional 2,601 square feet under a three-year lease.

“We’re basically keeping spaces leased,” Shorenstein’s Bay Area leasing director John Dolby tells GlobeSt.com. “Our goal is to keep the vacancies to minimum by being aggressive where we need to be on case by case basis.”

As of late January, full-service asking rates for space at City Center ranged between $32- and $38 per square foot per year, depending on the building, the floor, length of commitment and credit quality. Occupancy ranged from 97% at 505 14th and 555 12th to 95% at City Square, 94% at 1111 Broadway and 91% at 1300 Clay.

Looking ahead, a leasing decision is in the near future for Bechtel, which occupies the 17th floor of 1111 Broadway on a sublease that is soon to expire along with the master lease. Beyond that, APL will be vacating 140,000 square feet in the lower floor of the building later this year but has a lease commitment through 2016.

“It’s a nice building in a nice location and [APL] just completed remodeling a little over a year ago,” Dolby told GlobeSt.com recently. “In the past when there’s been space given back it’s been snapped up pretty quickly.”

Dolby said he expects APL to undercut the market but doesn’t see it as a problem for Oakland City Center because it doesn’t have any other large spaces that would be competing against it. Indeed, he sees the availability as potentially a good thing.

“There hasn’t been a big chunk of that quality of space in a long time; it opens up an opportunity for someone who maybe could not have afforded the building in the past,” he said. “It could also draw a prospective tenant from San Francisco” that it looking to lower its lease cost while also making it more convenient to the labor pool, he says.

Ryan Hattersley and Charlie Allen of the Oakland office of Cushman and Wakefield acted on behalf of Itron; Don Merek with Mohr Partners in Walnut Creek represented OREXCO; Daniel Pivnick with Cornish and Carey acted on behalf of Siegel and Yee; Sam Murik of Cushman & Wakefield’s Phoenix, Arizona office handled the transaction for Compass Lexecon. John Dolby handled all the office transactions for Shorenstein Realty Services.