December 18, 2009
It took a few years, but Moffett Towers has landed a tenant (ht Phil). Rambus (RMBS: 14.10 +0.79%) has become the guinea pig. It signed a lease for 125,000 square feet on December 15th. The 10-year term begins around July 2010 once its tenant improvements are completed.
The space will be delivered turnkey. They are occupying a portion of the first floor and floors 6,7,8 of 1040 Enterprise building.
The terms of the lease are:
- $2.45 NNN start rate with 3% annual increases
- 6-Months Free Rent
- Right to cancel after 7 years
This is a great deal for Jay Paul in our opinion, but not so much for Rambus. 6 months free rent? That is hardly anything in today’s market for a tenant this size. $2.45 NNN start rate — that is a fairly rich number, even for a turnkey job. There are deals floating out there right now offering much more favorable terms. Rambus’ existing lease expires at the end of 2010. The fact that they are getting six months of free rent probably means that they didn’t even get Jay Paul to pick up their rent obligation for the second half of 2010 at their existing location and in effect are getting little to no free rent.
Cornish & Carey brokered both sides of the deal (different brokers).
Good job Jay Paul. Rambus, better luck next time.
As for Rambus’ existing digs at 4440 El Camino Real (pictured below). Tough break for Behringer Harvard who paid Sand Hill Property Company about $40M for the existing building 3 years ago. That asset was built in 2000, is about 95,000 square feet on a 1.5 acre parcel on El Camino in Los Altos. Either way though, they would have gotten nailed, be it on rent, or vacancy though at this point a 100K SF vacancy on El Camino in Los Altos probably isn’t something I’d want to have with such a high basis.
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