NorthPoint is paying $38 per sf for its 303 Second St. locationin San Francisco, but has preleased 100,000 sf at EmeryvilleStation North for occupancy next spring. Real estate sources saythe company is also markeitng that space for lease.

The moves follow the failure of an $800 million planned mergerwith Verizon Communications. Verizon exercised a clause in themerger agreement that allowed the company to pull out of the dealif NorthPoint's business suffered adverse effects. NorthPoint'sstock had already plummeted from around $15 when the deal wasannounced last summer to approximately $2.50. But when NorthPointrevised its third-quarter results to show a bigger-than-expected($90 million-plus) loss, Verizon terminated the deal andNorthPoint's stock sank to less than a dollar. NorthPoint has fileda suit against Verizon for more than $1 billion contending thatthere was no factual or legal basis for the termination.

NorthPoint's consolidation comes on the heels of a studyreleased by Whitney Cressman Ltd last week. The study shows about2.3 million sf of sublease space has become available in the lastthree months. Approximately 66% or 872,616 sf of the space istechnology and "new economy" related and located in the South ofMarket area.Whitney Cressman predicts a vacancy rate of 1.2% in thecity by year's end and 5.9% by the end of first-quarter 2001.

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