CPMC says it will begin moving some of its administrativeoperations into the building early this year. While the negotiatedlease rate was not disclosed local industry sources tellGlobeSt.com that CPMC likely received a break from the asking leaserate of $45 per sf per year because it will occupy the spacelargely as is, saving the building owner the cost of tenantimprovements, which are typically built into the asking rate. At$40 per sf, the value of the lease would be approximately $68million.

The lease is related to CPMC's effort to comply with stateseismic requirements by 2013. A CPMC source tells GlobeSt.com thatthe lease will allow the hospital to consolidate a good portion ofits administrative operations in a single building while alsofreeing up other locations for redevelopment.

For example, the source says CPMC houses several of itsdepartments--communications, marketing, development and itsphilanthropic arm--in the Cathedral Hill Hotel at Van Ness Avenueand Geary Boulevard, which it hopes to raze and replace with a new$1.7-billion hospital that meets the new seismic requirements.Additional CPM departments housed in leased offices around the cityalso will relocate to 633 Folsom, which based on 250 sf per personcould house close to 700 employees.