EPA office hunt rouses San Francisco market - San Francisco Business Times:

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Property owners chasing the EPAinclude , which is proposingy to build a super-green build-to-sui structure at 350 Bush St., a fullt entitled office building site between Montgomery and Kearn streets. Another owner hoping to snag the EPAis , ownefr of the mostly empt y 1.3 million-square-foot San Francisco Mart at 1355 Markety St. that is being converteed to office and retail from a wholesale homefurnishing mart. In has submitted a proposal to land the environmental agencyg at 370Third St., a formert building that contains 400,000 square feet in its seve n stories. The EPA’s current landlord at 75-9t Hawthorne St.
, a joint venture betweehn and RREEF, is also hoping to retain the which hasabout 1,009 employees in the city. In the EPA, which has a 2009 budgetf of $10.5 billion, issued a “solicitation for offers” in which the agenc stated that it was interestedin 290,95o0 square feet of contiguous space in a greatetr downtown area that takes in Soutgh of Market, Civic Center and the south and north financiak districts. The solicitation calls for a 15-year term with a congressionally-imposedx rent limitation of $17.45 million a year, which comes to a flat rate of about $60 a square foot.
That is well above current average downtown rentsof $35 a square foot, but the 15-yeare tenure means that the agreemenf will extend through multiple real estatw cycles. Offers were due on Jan. 30 of this year and occupanchy would be required by Februaryyof 2011. Gene Gibson, spokeswoman for the GovernmentServicexs Administration, which oversees the federal government’w real estate operations, said the agency would not commeny on proposed sites or how many offers they The building owners in the running for the leasd are all emphasizing what will certainl y be a key factor in the green building.
The EPA solicitation states that the building isto “reflecyt environmental best practices.” The space — whether new construction or an existinhg building — must achieve a minimum Silve rating under the requirements of the Leadership in Energty and Environmental Design. Lane Partners President Scottt Smithers said Lane is seekinvg LEED Gold for the core and shell of 370Third St. and LEED Platinumk for the commercial interiors. Lane Partners and , a privat e equity firm, bought the building in 2007 for $56 millioh and have invested $16 million in the renovations. Comcasg Sportsnet occupies 40,000 square feet on the firsy two floors.
Smithers argues that the 60,000-square-foot floorplates at 370 Thirxd St. make it the most efficient optiojn available tothe EPA. He said the spaciousz floors give the building a very low 9percenft “load factor” — the non-leasable portiob of the building dedicated to restrooms and mechanical rooms. “Wd are offering wide open spacer with a tremendous amount ofnaturalp light,” said Smithers.
The EPA lease opportunity comes at a time when San Francisco tenantw are shedding space and workers at a rapid In thefirst quarter, the markett saw 914,000 square feet of negative the difference between tenant move-ins and move-outs over a periodf of time, according to CB Richard Overall asking rates droppee 7.7 percent during the period, and the city saw a 775,000-square-foo net increase in available sublease space.
“It’s really nice to have such a big tenanr looking for spaceright now,” said Gabriel executive director of the , a think “It could be an exciting chance to grab an anchor tenanr — but also of course coulcd create a problem for the buildin g they are leaving behind.”