University of California, Office of the President

Client Situation

University of California, Office of the President’s (UCOP) satellite headquarters operation is located at 300 Lakeside Drive, Oakland, occupying five floors of a 28-story building. Two years in advance of its mid-2008 lease expiration, UCOP commenced its facilities review and procurement process for a real estate partner, as required by the Regents of California.

Consideration Analysis

UCOP retained Studley (now Savills Studley) to represent its interest in assessing and analyzing all conceivable occupancy alternatives in the East Bay, and to structure the best possible solution. Studley negotiated with all finalists, capitalizing on, and leveraging, UCOP’s excellent credit. Studley’s discussion with UCOP’s existing landlord focused on the landlord’s exposure and vacancy if UCOP didn’t renew, as well as UCOP’s “equity value” in the building vis-à-vis the landlord’s mortgage in the event of a refinance or other transfer event.

Result

Ultimately, the existing landlord acknowledged they could not afford to lose UCOP’s tenancy, and conceded on almost every requirement dictated by UCOP to renew, including cancellation, contraction and expansion options, rights of first offer, rental rate and tenant improvements. The landlord agreed to “turn-key” the entire capital improvement project as well as purchase new furniture for UCOP and install state-of-the-art cabling. In addition, the landlord accepted responsibility for managing the entire eight-phase, nine-month restack project using its internal and external resources, at no cost to UCOP. Our solution yielded savings of $5 million as compared to the next best alternative, provided ultimate flexibility, and allowed UCOP employees to remain in their preferred location for another eight years.

Summary Information

  • Property: 300 Lakeside Drive, Oakland, CA
  • Transaction Size: 120,000 SF
  • Transaction Type: Renewal
  • Service Line: Office

Meet the Team

Hart, Matt

Hart, Matt

Executive Managing Director
415.617.9641