December 28, 2009
Harmonic (HLIT: 6.52 +1.09%) has also made a big move by signing a lease about a week ago for 188,332 SF at Carlyle Realty’s North First Street project (4300-4400 North First Street) in San Jose.
The terms of the lease were as follows:
- 10-Year Term
- September 1, 2010 commencement
- 2-Years Free Rent
- $1.90 NNN start (year 3), with $.10 annual bumps
- $100 PSF Tenant Improvement dollars (over shell)
- Right to cancel after 7 years
- Right of first offer to purchase
- Right of first offer to expand (subordinate to IBM)
The building Harmonic is taking was last transacted at the peak of the market, back in July 2007 when Cisco Systems (CSCO: 23.03 +0.61%) sold the project to Carlyle for $98M ($257 psf). This has proven to be a raw deal for Carlyle, who has been sitting on a two-thirds empty building since, and the tenant they have now landed to take them to 80% leased is costing them about 6 years of consideration to get (and they have a right to cancel in the 7th year).
When we posted about the Rambus deal, we felt that deal was rich while the Harmonic deal is more representative of the current market for big chunks of space.
- Moffett Towers Lands Rambus For 125K SF
- Cortina Systems’ Sunnyvale Deal
- Cisco Announces Hiring Freeze; Plans $1B Cost Cuts
- Brocade to Buy Foundry Networks; Combine for a 800K SF Silicon Valley Footprint
- Apple Leases 60K SF Cupertino Landing Office Building; Blue Coat Sublease Next?