First Quarter 2011 San Francisco Office Report SAN FRANCISCO OFFICE Lic #00832933 One Bush Street, Suite 400 San Francisco, CA 94104 Tel: 415.445.8888 Fax: 415.445.8886 www.ccareynkf.com
TABLE OF CONTENTS Coverage Map 1 Office Update and Q1 2011 in Review 2 Office Market Highlights - Leasing 3 Office Market Highlights - Sales 5 San Francisco Class A Focus 6 North Financial District Market Summary 8 South Financial District Market Summary 10 North Waterfront / Jackson Square Market Summary 12 Van Ness / Civic Center Market Summary 13 Union Square Market Summary 14 SoMa Market Summary 15 Agent Roster 19
COVERAGE MAP 1
OFFICE UPDATE AND Q1 2011 IN REVIEW Driven by the organic expansion of technology based industries, San Francisco s economy appears to be in recovery mode. In a matter of 12 months the local unemployment rate has dropped from 10.1 percent to 9.5% (according to January figures). Furthermore, corporate confidence has led to increased spending on information technology, which has inturn positively affected the majority of local business sectors. The financial service and professional service sectors have also begun to thaw, filling holes leftover from the economic downturn. The San Francisco office market as a whole has benefited from local economic stabilization, recording 327,701 square feet of positive net absorption through Q1-11. The overall office vacancy rate fell from 14.2% to 13.6% quarter-overquarter. This increase in occupancy has in turn begun to push CBD Class A asking rents up to $38.21/rsf fully serviced (compared to $37.49/rsf fully serviced in Q4-10). Leasing activity in the first quarter was once again led by technology companies. Salesforce.com expanded by 55,977 square feet at 123 Mission Street, Idle Games leased 33,252 square feet at 875 Howard Street, InqMobile leased 10,925 square feet at 139 Townsend Street and Aptimus renewed and expanded its sublease from AON at 199 Fremont Street for a total of 51,429 square feet. As mentioned, leasing velocity from San Francisco financial and legal firms has begun to re-emerge; with Sedgwick, Detert, We expect to see continued Moran, & Arnold leasing nearly improvement in office market 90,000 square feet at 333 Bush fundamentals moving forward, aided Street and Mellon Bank committing by future employment gains and a to 32,000 square feet at 100 Pine Street. Due to this increase in leasing activity many landlords have begun to pull back on concession packages and increase average asking rates citywide which currently average $38.21/rsf (all building classes). This trend is especially true in the SOMA submarket, where a handful of creative, brick and timber buildings are commanding starting rents in the mid-$40 s fully serviced. Strong demand from new and expanding tech tenants, coupled with diminishing creative inventory has placed a premium on creative space, further bifurcating the market between creative and traditional office use. In an attempt to revitalize the Central-Market area, the city of San Francisco recently approved a Mid Market Tax Break designed to alleviate increases to payroll tax for the first six years for companies locating within a specified zone in proximity to the 960-1455 blocks of Market Street. Twitter is reportedly in lease negotiations for over 210,000 square feet at Shorenstein s 1355 Market Street, located within the tax break zone. This could turn the Central-Market area into the next submarket to welcome the expanding technology sector. bullish technology sector. Reemerging professional services firms benefiting from the overall increase in business activity will be in a better position to review future occupancy needs. Look for landlords to continue to push asking rents and limit lease concessions as space options for tenants diminish. VACANCY Q1'11 13.54% Q4'10 14.25% CLASS A ASKING RENTS Q1'11 $38.21 Q4'10 $35.69 NET ABSORPTION Q1'11 ±327,701 TOP LEASES Sephora 525 Market Street ±110,588 Keker & Van Nest LLP 633 Battery Street ±90,000 Sedgwick, Detert, Moran & Arnold LLP 333 Bush Street ±89,076 2
OFFICE MARKET HIGHLIGHTS LEASING Average Asking Rate ¹ 2011 2011 Submarket Net Rentable Area * Vacancy Total Vacancy ³ Total Availability Class A Class B Class C Q1 Net Absorption ² Y-T-D North Financial District 28,530,271 4,027,374 14.12% 18.28% $39.23 $31.04 $24.85 4,394 4,394 South Financial District 24,705,411 2,512,589 10.17% 13.17% $38.46 $32.40 $25.76 155,136 155,136 North Waterfront/Jackson Sq. 6,559,001 735,109 11.21% 13.43% $33.00 $29.75 $24.25 (6,839) (6,839) Van Ness/Civic Center 6,437,028 1,195,522 18.57% 18.68% $27.95 $24.50 $23.65 63,739 63,739 Union Square 5,628,225 484,786 8.61% 13.42% $32.00 $28.65 $25.00 39,692 39,692 SoMa** 10,432,871 2,190,407 21.00% 21.00% $40.21 $35.70 $27.45 71,579 71,579 San Francisco Office Market 82,292,807 11,145,787 13.54% 16.40% $38.21 $31.43 $26.06 327,701 327,701 ** SoMa Inventory includes the following markets: South of the Market; Yerba Buena; Multimedia Gulch; Mission Bay; South Beach; Inner Mission & Potrero Hill Class A Historical Trends Class A Quarter Total RSF Direct Vacant Sublet Vacant Vacancy Absorption Rental Rates ¹ 2007/Q1 46,668,376 3,422,734 441,075 8.3% 91,954 $42.02 Q2 46,663,509 3,286,066 487,191 8.1% 92,522 $43.32 Q3 46,663,509 3,083,395 355,421 7.4% 240,597 $46.82 Q4 46,663,509 2,976,387 352,776 7.1% 154,149 $46.82 2008/Q1 47,322,203 2,754,242 365,733 6.6% 209,188 $46.91 Q2 47,595,475 3,243,799 393,792 7.6% (517,616) $46.94 Q3 47,595,475 3,448,110 744,607 8.8% (555,126) $44.07 Q4 48,151,794 4,587,686 841,335 11.3% (1,236,304) $41.26 2009/Q1 48,219,559 4,968,642 1,122,238 12.6% (661,859) $37.02 Q2 48,219,559 5,009,042 1,273,766 13.0% (190,864) $35.49 Q3 48,219,559 4,995,774 1,178,876 12.8% 108,158 $34.64 Q4 48,337,119 5,439,820 962,606 13.3% (227,776) $34.64 2010/Q1 48,337,137 5,809,095 812,902 13.7% (87,475) $34.78 Q2 48,337,137 5,841,640 876,466 13.9% (96,109) $35.02 Q3 48,337,137 5,908,685 836,353 14.0% (26,932) $35.64 Q4 48,363,449 6,106,107 588,634 13.8% 50,297 $36.69 2011/Q1 48,362,494 5,900,447 514,103 13.3% 206,666 $38.21 CLASS A HISTORICAL VACANCY VS. LEASE RATES 1 Rates are quoted as Full service ³ Vacancy is based on vacant square footage 2 Absorption is based on vacant square footage * Includes all classes of office space 3
OFFICE MARKET HIGHLIGHTS LEASING (CONT.) 525 Market Street BY THE NUMBERS Sephora SAN FRANCISCO renewed OFICE and expanded FIRST QUARTER at 525 Market Street for ±110,588 square feet making it the largest lease transaction of the first quarter. Significant Leases (By Square Footage) Largest Leases Tenant Lessor (Sublessor) Address Sq. Ft. Sephora ( E ) ( R ) NY State Teachers Retirement System 525 Market Street 110,588 Keker & Van Nest, LLP ( R ) Brannan Street Investors 633 Battery Stret 90,000 Sedgwick, Detert, Moran & Arnold LLP Brookfield Properties 333 Bush Street 89,076 Goodby, Silverstein & Partners ( R ) Prime Holdings Inc. 720 California Street 81,065 Williams Sonoma Smith Lucille H Trust 100 North Point Street 60,000 Wells Fargo Insurance Services Shorenstein Company LLC 45 Fremont Street 57,081 Salesforce.com ( C ) ( E ) Sumitomo Corporation of America 123 Mission Street 55,977 Catholic Healthcare West ( R ) McCarthy Cook & Company 185 Berry Street 55,000 Aptimus ( E ) ( S ) ( R ) AON 199 Fremont Street 51,429 CA Department of General Services ( R ) Manulife Financial 575 Market Street 36,324 Idle Games Hudson Pacific Properties 875 Howard Street 33,252 WSP Flack + Kurtz ( C ) ( R ) Ashforth Pacific/GE Pension 405 Howard Street 33,155 Largest Pending Leases Tenant Lessor (Sublessor) Address Sq. Ft. Twitter Shorenstein Company LLC 1355 Market Street 210,000 Hellman Freedman, Farallon Capital, Pisces, Offit Capital ( R ) Morgan Stanley One Maritime Plaza 175,000 Farella, Braun + Martel, LLP ( R ) Shorenstein Company LLC 235 Montgomery Street 122,000 Zynga ( E ) TMG Partners 650 Townsend Street 80,000 Moss Adams Hines 101 2nd Street 30,000 Q1 2011 Top Contiguous Spaces (vacant/ available in the next 12 months) Address Lessor (Sublessor) Sq. Ft. 100 Van Ness Avenue National Electric Benefits Foundation 597,443 1355 Market Street Shorenstein Company LLC 518,232 888 Brannan Street Wells Fargo 400,254 680 Folsom Street TMG/ Rockwood Capital 400,000 370 Third Street Lincoln/Lane Partners 367,027 500 Terry Francois Blvd. Sobrato Development 278,512 50 Fremont Street TIAA-CREF 257,696 ( S ) = Sublease ( R ) = Renewal ( E ) = Expansion ( C ) = Cornish & Carey Commercial Newmark Knight Frank Involvement 4
OFFICE MARKET HIGHLIGHTS- SALES (CONT.) BY THE NUMBERS Shorenstein Company LLC purchased 1355 Market Street & 875 Stevenson Street (±1,105,000 square feet total) from the ADCO Group, the largest purchase of the first quarter. 1355 Market Street Significant Sale Statistics (By Square Footage) Largest Buildings Sales (By Square Footage) Building Seller Buyer Sq. Ft. 1355 Market Street & 875 Stevenson Street ADCO Group Shorenstein Company LLC 1,105,000 Waterfront Plaza (1700-1800 Montgomery Street) Lincoln Property Co LaSalle Investment Management 297,260 500 Terry Francois Blvd. Lionstone Sobrato Development 278,512 550 Kearny Street * Lender Highridge Partners 196,630 530 Bush Street STG Group HCV Pacific Partners 104,000 250 Brannan Street Broe Cos Kilroy Realty 90,348 200 California Street ( C ) Trophy Properties LLC Manchester Capital Management LLC 23,588 Largest Buildings for Sale (Over 50,000 Square Feet) Building Seller Buyer Sq. Ft. 409 & 499 Illinois Street Shorenstein Company LLC N/A 453,256 888 Brannan Street (Pending) Wells Fargo SKS Investments (Rumored) 400,254 301 Howard Street* Lender Embarcadero Capital Partners 306,603 1155 Market Street (Pending) Metcalf Family Trust Unidentified 140,781 350 Rhode Island (Pending) Paladin Realty w/ CalSTRS Tishman Speyer (Rumored) 135,000 250 Montgomery Street (Pending) Argonaut Private Equity Unidentified 116,078 600 Townsend (East) Street LBA Realty N/A 82,792 543 Howard Street Gordon Development N/A 75,000 10 United Nations Plaza Hill Companies LLC N/A 72,031 670 5th Street ( C ) Metrovation & Terranomics Development, LLP N/A 72,000 642 Harrison Street 642 Harrison/Hawthorne LLC N/A 59,169 Projects Planned (By Square Footage) Building Owner Location Status Sq. Ft. 222 Second Street Tishman Speyer SFD Planning 700,000 350 Bush Street & 500 Pine Street Lincoln Properties NFD Entitled/ On Hold 400,000 680 Folsom Street TMG/ Rockwood Capital SFD Planning 400,000 535 Mission Street Beacon Capital Partners SFD Entitled 307,000 350 Mission Street ( C ) GLL Real Estate Partners SFD Entitled / Marketing Space 300,000 Piers 27-31 Shorenstein Company LLC North Waterfront Planning 300,000 Foundry Square III Wilson Meany Sullivan SFD Entitled 278,710 * = Note Sale ( C ) = Cornish & Carey Commercial Newmark Knight Frank Involvement 888 Brannan Street s RBA is based on entitlements acquired in 2010 to rezone the property. 5
SAN FRANCISCO CLASS A FOCUS TIER 1, 2 & 3 Energy Star LEED Certified LEED - Pending 6
SAN FRANCISCO CLASS A FOCUS TIER 1, 2 & 3 Energy Star LEED Certified LEED - Pending 7
NORTH FINANCIAL DISTRICT MARKET SUMMARY 1st Quarter, 2011 Vacancy Rate Vacant (SF) Net Absorption Building Class Total RSF Overall Direct Sublet Overall Direct Sublet Current Quarter Q4 '10 Rental Rates¹ A 21,484,328 14.0% 12.6% 1.5% 3,018,341 2,698,792 SAN FRANCISCO 319,549 64,319 OFICE FIRST 111,598 QUARTER $39.23 B 6,272,073 15.3% 14.9% 0.4% 960,940 937,351 23,589 (62,991) 28,672 $31.04 C 773,870 6.2% 5.7% 0.5% 48,093 44,093 4,000 3,066 16,289 $24.85 28,530,271 14.12% 12.90% 1.22% 4,027,374 3,680,236 347,138 4,394 156,559 Historical Trends Class A Quarter Total RSF Direct Vacant Sublet Vacant Vacancy Absorption Rental Rates 2007/Q1 20,968,597 1,703,435 202,698 9.0% (3,396) $37.60 Q2 20,968,597 1,654,847 268,598 9.1% (121,277) $43.24 Q3 20,968,597 1,381,444 181,956 9.2% (17,312) $45.15 Q4 20,968,597 1,252,588 177,665 7.5% 83,823 $48.30 2008/Q1 21,482,945 1,294,006 131,722 6.6% 55,817 $48.30 Q2 21,482,945 1,430,829 153,364 7.4% (134,611) $48.30 Q3 21,482,945 1,525,829 477,404 9.3% (286,019) $45.30 Q4 21,482,945 2,075,292 563,406 12.3% (480,054) $42.20 2009/Q1 21,546,720 2,189,346 733,855 13.6% (254,346) $37.98 Q2 21,546,720 2,215,344 844,216 14.2% (136,359) $36.30 Q3 21,546,720 2,320,104 787,246 14.4% (47,790) $35.40 Q4 21,546,720 2,437,999 677,910 14.5% (8,559) $35.40 2010/Q1 21,484,328 2,460,520 594,145 14.2% 61,244 $35.68 Q2 21,484,328 2,496,782 592,519 14.4% (34,636) $35.89 Q3 21,484,328 2,623,061 571,197 14.9% (104,957) $36.01 Q4 21,484,328 2,701,790 380,870 14.3% 111,598 $37.45 2011/Q1 21,484,328 2,698,792 319,549 14.0% 64,319 $39.23 CLASS A HISTORICAL VACANCY VS. LEASE RATES 1 Rates are quoted as full service 8
NORTH FINANCIAL DISTRICT MARKET SUMMARY BY THE NUMBERS Sedgwick, Detert, Moran & Arnold LLP leased ±89,076 square feet deal at 333 Bush Street. 14.12% overall vacancy in Q1 11, compared to 14.11% in Q4 10. ±4,394 square feet of absorption in Q1 11, compared to ±156,559 square feet of positive absorption in Q4 10. CLASS A HISTORICAL DIRECT VS. SUBLEASE AVAILABLE SPACE 9
SOUTH FINANCIAL DISTRICT MARKET SUMMARY Quarter, 2011 Vacancy Rate Vacant (SF) Net Absorption Building Class Total RSF Overall Direct Sublet Overall SAN Direct FRANCISCO Sublet Current OFICE Quarter FIRST Q4 '10QUARTER Rental Rates¹ A 20,239,092 10.4% 9.4% 1.0% 2,097,330 1,902,776 194,554 173,634 531 $38.46 B 3,244,087 7.3% 7.2% 0.1% 237,683 234,404 3,279 (5,476) (12,596) $32.40 C 1,222,232 14.5% 14.2% 0.3% 177,576 173,544 4,032 (13,022) (9,041) $25.76 24,705,411 10.17% 9.35% 0.82% 2,512,589 2,310,724 201,865 155,136 (21,106) Historical Trends Class A Quarter Total RSF Direct Vacant Sublet Vacant Vacancy Absorption Rental Rates 2007/Q1 19,128,276 991,788 160,721 6.0% 252,536 $37.10 Q2 19,128,276 998,881 142,012 6.0% 13,586 $42.67 Q3 19,128,276 1,157,348 92,021 6.5% 114,922 $43.40 Q4 19,128,276 1,294,077 83,682 7.2% (128,390) $47.60 2008/Q1 19,612,763 1,064,770 149,049 6.2% (32,660) $47.60 Q2 19,612,763 1,153,898 158,734 6.7% 37,426 $47.60 Q3 19,612,763 1,357,040 187,752 7.9% (73,457) $47.60 Q4 20,169,082 1,977,938 203,342 10.8% (410,583) $44.20 2009/Q1 20,181,060 2,089,038 284,973 11.8% (237,133) $41.50 Q2 20,181,060 2,086,629 297,292 11.8% (9,910) $37.35 Q3 20,181,060 1,990,618 248,285 11.1% 145,018 $36.20 Q4 20,181,060 1,966,796 191,732 10.7% 80,375 $35.30 2010/Q1 20,239,092 2,099,081 166,408 11.2% (106,961) $35.30 Q2 20,239,092 2,103,286 240,025 11.6% (77,822) $35.30 Q3 20,239,092 2,022,986 248,509 11.2% 71,816 $35.78 Q4 20,239,092 2,064,200 206,764 11.2% 531 $37.53 2011/Q1 20,239,092 1,902,776 194,554 10.4% 173,634 $38.46 CLASS A HISTORICAL VACANCY VS. LEASE RATES 1 Rates are quoted as full service 10
SOUTH FINANCIAL DISTRICT MARKET SUMMARY BY THE NUMBERS Salesforce.com leased ±55,977 square feet of expansion space at 123 Mission Street. 10.17% overall vacancy in Q1 11, compared to 10.80% in Q4 10. ±155,136 square feet of positive absorption in Q1 11, compared to (±21,106) square feet of negative absorption in Q4 10. CLASS A HISTORICAL DIRECT VS. SUBLEASE AVAILABLE SPACE 11
NORTH WATERFRONT/JACKSON SQUARE MARKET SUMMARY BY THE NUMBERS Keker & Van Nest, LLP renewed at 633 Battery Street for ±90,000 square feet. 11.21% overall vacancy in Q1 11, compared to 11.10% in Q4 10. (±6,839) square feet of negative absorption in Q1 11, compared to (±68,994) square feet of negative absorption in Q4 10. 1 st Quarter, 2011 Vacancy Rate Vacant (SF) Net Absorption Building Class Total RSF Overall Direct Sublet Overall Direct Sublet Current Quarter Q4 '10 Rental Rates¹ A 1,680,253 17.8% 17.8% 0.0% 298,875 298,875 0 755 (90,194) $33.00 B 3,458,047 10.6% 9.0% 1.6% 366,468 310,193 56,275 7,322 (8,896) $29.75 C 1,420,701 4.9% 4.1% 0.8% 69,766 57,866 11,900 (14,916) 30,096 $24.25 6,559,001 11.21% 10.17% 1.04% 735,109 666,934 68,175 (6,839) (68,994) CLASS A HISTORICAL VACANCY VS. LEASE RATES 1 Rates are Quoted as Full Service 12
VAN NESS/CIVIC CENTER MARKET SUMMARY BY THE NUMBERS 18.57% overall vacancy in Q1 11, compared to 19.56% in Q4 10. ±63,739 square feet of positive absorption in Q1 11, compared to ±5,045 square feet of positive absorption in Q4 10. Quarter, 2011 Vacancy Rate Vacant (SF) Net Absorption Building Class Total RSF Overall Direct Sublet Overall Direct Sublet Current Quarter Q4 '10 Rental Rates¹ A 2,105,547 22.2% 22.2% 0.0% 467,146 467,146 0 5,688 2,586 $27.95 B 2,682,719 25.2% 22.3% 2.9% 675,675 597,559 78,116 44,642 (1,383) $24.50 C 1,648,762 3.2% 3.2% 0.0% 52,701 52,701 0 13,409 3,842 $23.65 6,437,028 18.57% 17.36% 1.21% 1,195,522 1,117,406 78,116 63,739 5,045 CLASS A HISTORICAL VACANCY VS. LEASE RATES 1 Rates are quoted as full service 13
UNION SQUARE MARKET SUMMARY BY THE NUMBERS Inkling leased ±10,343 square feet at 153 Kearny Street. 8.61% overall vacancy in Q1 11, compared to 10.62% in Q4 10. ±39,682 square feet of absorption in Q1 11, compared to ±62,069 square feet of absorption in Q4 10. Quarter, 2011 Vacancy Rate Vacant (SF) Net Absorption Building Class Total RSF Overall Direct Sublet Overall Direct Sublet Current Quarter Q4 '10 Rental Rates¹ A 294,125 31.6% 31.6% 0.0% 92,824 92,824 0 0 9,664 $32.00 B 2,948,792 6.4% 6.3% 0.1% 188,387 185,031 3,356 18,222 13,770 $28.65 C 2,385,308 8.5% 8.5% 0.0% 203,575 203,050 525 21,470 38,635 $25.00 5,628,225 8.61% 8.54% 0.07% 484,786 480,905 3,881 39,692 62,069 CLASS A HISTORICAL VACANCY VS. LEASE RATES 1 Rates are quoted as full service 14
15
SOMA OFFICE UPDATE Q1 2011 SAN FRANCISCO OFFICE FIRST QUARTER By: Riccardo Gale Over the course of the past four quarters, the SOMA market has seen steadily increasing rates and decreasing vacancy. This trend continued with increased vigor this past quarter. Average asking rents across all classes soared to $37.64/rsf up from $30.90/rsf in the previous quarter. This represents a noteworthy 22% increase in average asking rents. Vacancy fell from 23.62% to 21.00%, with tenants absorbing 71,579 rentable square feet of office space. Although the market is much tighter for creative space, this the huge increase in average asking rents. Primarily driving the demand is, of course, the technology sector. There is a great deal of appetite for creative, collaborative space in those submarkets which provide good access to Caltrain and/or BART, including the ball park area, the Mission/Howard street corridor, and the always attractive 2 nd Street corridor. Driving the largest percentage of absorption this quarter were early stage start-ups and small users. In fact, only three transactions of over 20,000 rentable square feet were completed, and of those only Idle Games is a technology company. Demand for small, creative suites in the most coveted submarkets has so outstripped supply that asking rents there have pushed well into the $40 s per rentable square foot, fully serviced. But it s not just the coveted brick and timber space that is driving strong rates anymore. Well located, high-ceiling buildings such as 303 2 nd Street, which have some creative appeal and can deliver larger blocks of space for current occupancy or future expansion, are leasing with continued rent increases. Similarly, tenants who have traditionally been located in the heart of SOMA are showing more willingness to stretch their geographic parameters. Twitter s commitment to the Central-Market is evidence of this trend. Not surprisingly, the pace of investment activity has also increased from previous quarters. Following the sale of 250 Brannan Street for ±$365/rsf to Kilroy Realty, Tishman Speyer is rumored to be in contract to purchase 350 Rhode Island for ±$310/rsf, and Mission Bay s 500 Terry Francois has been sold by Lionstone to Sobrato Development at an undisclosed price. In addition, LBA Realty recently brought 600 Townsend (East) to the market. In conclusion, the first quarter of 2011 saw rapid increases in rents, particularly for small creative suites in prime locations. Many tenants are accordingly compelled to consider slightly more traditional buildings and fringe locations. VACANCY Q1'11 21.00% Q4'10 23.62% CLASS A ASKING RENTS Q1'11 $37.64 Q4'10 $30.90 TOP LEASES Catholic Healthcare West 185 Berry Street ±55,000 Idle Games 875 Howard Street ±33,252 ABM Industries 600 Harrison Street ±31,179 SUBLEASE SPACE AVAILABLE Q1'11 ±69,966 Q4'10 ±159,706 16
SOMA MARKET SUMMARY 1 st Quarter, 2011 Submarket # of Buildings Total Sq. Ft. Vacant Sq. Ft. Vacancy Rate SAN FRANCISCO OFICE Average Asking FIRST QUARTER Rent Absorption Sq. Ft. South Beach 17 2,102,980 183,472 8.72% $40.00 19,363 Multimedia Gulch 42 4,038,181 582,929 14.44% $28.25 39,248 Yerba Buena/South of Market 19 2,628,347 975,673 37.12% $24.05 (22,226) Potrero Hill / Inner Mission 14 1,099,626 169,821 15.44% $24.90 32,742 Mission Bay 2 563,737 278,512 49.40% $44.00 2,452 Totals: 94 10,432,871 2,190,407 21.00% $36.61 71,579 *Rates are based on a weighted average for available space only. SOMA Top Buildings Q1 2011 Building Stories Building Sq. Ft. Total ¹Rates Direct Avg. Direct Sq. Ft. Sublease Sq. Ft. Total Avail. Sq. Ft. Total Percent Avail. 185 Berry Street 6 939,549 $40.00 208,089 11,189 219,278 23.3% 475 Brannan Street 4 255,000 $42.00 0 0 0 0.0% 444 DeHaro Street 2 152,000 $38.00 110,666 0 110,666 72.8% 303 2nd Street 10 700,945 $36.00 33,878 0 33,878 4.8% 501 2nd Street 7 207,809 $36.00 5,776 0 5,776 2.8% 625 2nd Street 4 134,447 $38.00 0 33,000 33,000 24.5% 123 Townsend Street 6 138,735 $42.00 0 0 0 0.0% 139 Townsend Street 5 57,782 $45.00 10,925 7,105 18,030 31.2% 410 Townsend Street 4 73,755 $35.00 0 0 0 0.0% 1 Rates are Quoted as Full Service Top Contiguous Spaces Available (vacant/available space in the next 12 months) Address Sq. Ft. 680 Folsom Street ±400,000 370 Third Street ±367,027 500 Terry Francois ±278,512 888 Brannan Street ±260,000 499 Illinois - Bldg. 2 ±210,275 17
SOMA MARKET SUMMARY (CONT.) Top Leases Q1 2011 Tenant Address Lessor Square Feet Catholic Healthcare West ( R ) 185 Berry Street McCarthy Cook & Company ±55,000 Idle Games 875 Howard Street Hudson Pacific Properties ±33.252 ABM Industries 600 Harrison Street Pell Development ±31,179 Airbnb.com ( S ) 99 Rhode Island Street Aliph ±20,000 BitTorrent ( C ) 303 2nd Street Kilroy ±17,522 Top Pending Leases Q1 2011 Tenant Address Lessor Square Feet Zynga ( E ) 650 Townsend Street TMG Partners ±80,000 Top Buildings for Sale Q1 2011 Building Seller Buyer Square Feet 409 & 499 Illinois Street Shorenstein Company LLC N/A ±453,256 888 Brannan Street (Pending) Wells Fargo SKS Investments (Rumored) ±400,254 350 Rhode Island Street (Pending) Paladin Realty w/ CalSTRS Tishman Speyer (Rumored) ±135,000 600 Townsend (East) Street LBA Realty N/A ±82,792 543 Howard Street Gordon Development N/A ±75,000 670 5th Street ( C ) Metrovation & Terranomics Development, LLP N/A ±72,000 642 Harrison Street 642 Harrison/Hawthorne LLC N/A ±59,169 ( * ) = Note Sale ( S ) = Sublease ( R ) = Renewal ( E ) = Expansion ( C ) = Cornish & Carey Commercial Newmark Knight Frank Involvement 18
AGENT ROSTER OFFICE LEASING Roman Adler 415.274.4434 radler@ccareynkf.com Jonathan Allen 415.445.5138 jallen@ccareynkf.com Karl Baldauf 415.445.5117 kbaldauf@ccareynkf.com Bill Benton 415.274.4434 bbenton@ccareynkf.com Mike Brown 415.274.4423 mbrown@ccareynkf.com John Cashin 415.445.5112 jcashin@ccareynkf.com Donnette Clarens 415.445.5120 dclarens@ccareynkf.com Bryan Courson 415.445.5155 bcourson@ccareynkf.com Nathan Crawford 415.274.4439 ncrawford@ccareynkf.com Kevin Delehanty 415.445.5132 kdelehanty@ccareynkf.com Shannon Dolan 415.445.5105 sdolan@ccareynkf.com Riccardo Gale 415.445.5119 rgale@ccareynkf.com Liz Hart 415.513.2170 ehart@ccareynkf.com Jim Lucas 415.445.5106 jlucas@ccareynkf.com John Norton 415.445.5137 jnorton@ccareynkf.com Bart O Connor 415.445.5102 boconnor@ccareynkf.com Will Scovill 415.445.5134 wscovill@ccareynkf.com Nick Slonek 415.445.5100 nslonek@ccareynkf.com Cassidy Zerrer 415.274.4432 czerrer@ccareynkf.com RETAIL LEASING Tracy Chiao 415.445.5140 tchiao@ccareynkf.com Erika Elliott 415.445.5124 eeliott@ccareynkf.com Tom Neuburger 415.445.5129 tneuburger@ccareynkf.com Julie Taylor 415.445.5128 jtaylor@ccareynkf.com INVESTMENTS Russ Sherman 415.445.5104 rsherman@ccareynkf.com CAPITAL GROUP Ben Bullock 415.445.5139 bbullock@ccareynkf.com Erik Doyle 415.445.5111 edoyle@ccareynkf.com Sean Fulp 415.445.5123 sfulp@ccareynkf.com Allison Gorelick 415.445.5131 agorelick@ccareynkf.com Mike Hegseth 415.445.5113 mhegseth@ccareynkf.com Kyle Ladewig 415.445.5103 kladewig@ccareynkf.com Brad Zampa 415.445.5115 bzampa@ccareynkf.com Ali Siddiqui 415.445.5170 asiddiqui@ccareynkf.com MARKETING/SALES ASST. Lauren Collette 415. 274.4436 lcollette@ccareynkf.com Natelle Fitzgerald 415.274.4415 nfitzgerald@ccareynkf.com Kathryn Jackson 415.445.5161 kjackson@ccareynkf.com Madeline Kieselhorst 415.445.5114 mkieselhorst@ccareynkf.com Raquel Ledesma 415.445.5136 rledesma@ccareynkf.com Melinda Miyagishima 415.445.5108 mmiyagishima@ccareynkf.com Cynthia Morales 415.445.5149 cmorales@ccareynkf.com Rachel Pagan 415.445.5121 rpagan@ccareynkf.com OFFICE ADMIN. Nicole Costello 415.274.4436 ncostello@ccareynkf.com BK Masterson 415.445.8888 bkmasterson@ccareynkf.com 19
2