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Committee backs eight-year Pier 26 lease with IDEO, citing steady revenue and tenant improvements
Summary
The committee recommended approval of an eight-year lease with design firm IDEO for roughly 26,900 sq ft at Pier 26 Annex, with first-year rent at $3.35/sq ft ($90,118/month), an estimated $1.1 million to the Port in year one and about $10 million over eight years; the Port said it prefers extending leases for stable office tenants rather than competitive solicitations.
Elsa Lam, property manager for the Port of San Francisco, requested Board approval to enter lease L16159 with IDEO for office space at Pier 26 Annex. Lam said IDEO has been a long-standing tenant and occupies roughly 26,900 square feet; the lease sets first-year rent at $3.35 per square foot (stated as $90,118 per month), rises to $3.60 per square foot in year two and then increases 3% annually.
"Their premises is approximately 26,900 square feet of office space. The monthly rate for the premises is $3.35 a square foot, which equates to $90,118 per month in rent," Lam told the committee. She said the lease will generate over $1,100,000 in the first year and approximately $10,000,000 over the eight-year term.
Kevin Campbell of the Budget Analyst's Office summarized that the lease combines two separate leases into one eight-year lease, confirmed the rent schedule and recommended approval. Supervisors asked whether the Port typically extends leases or issues new solicitations; Lam said the Port generally negotiates extensions for office tenants in good standing rather than putting the space out to bid.
No public comments were offered. The committee moved the lease to the full Board with a positive recommendation by voice vote. If the Board approves, the Port will execute the lease and proceed with any outstanding administrative steps.
