The 8.6-million-square-foot Santa Clara office market ended the year with a 14% vacancy rate and an average asking rate of $2.95 per square foot per month. Yahoo's lease overhang--about 13 months once it vacates—is being offered for sublease at $1 per square foot per month. The company is believed to be paying somewhere in the vicinity of $1.60 per square foot.

"They signed the lease in 2003 at a pretty favorable rent," Field tells GlobeSt.com. "They are passing some of that onto a new subtenant."

Owned by the Sobrato Organization, the buildings were built in 2000 at 2811-2821 Mission College Blvd. Given the short remaining sublease term, Field says any prospective tenant likely would be negotiating directly with Sobrato as well.

Yahoo's headquarters campus here totals 1.8 million square feet and is comprised of both Yahoo-owned buildings and approximately 800,000 square feet that it leases from Sobrato, including the two buildings it is vacating. A Yahoo spokesperson tells GlobeSt.com it will be consolidating employees from the Mission College buildings onto its Great America and Sunnyvale campuses.

"Yahoo is not only one of our largest tenants they are a very good tenant to work with," Field says. "Yahoo notified us well in advance. This is just part of the process companies go through. We look forward to finding another tenant for the space."

Yahoo on Wednesday reported a fourth quarter loss of $303 million or $0.22 per share, compared to a $206-million ($0.15 per share) profit in the same 2007 period. Revenue for the quarter was $1.8 billion, down 1%. Yahoo's new CEO Carol Bartz, formerly with Autodesk Inc., said the company's cost reduction initiative has included the aforementioned 10.5% headcount reduction, restructuring of certain business partnerships, outsourcing of various business support activities, reduction of non-headcount related spending, and facilities consolidation.

With regard to severance, facility and other restructuring costs, the company said it incurred costs of $108 million including $80 million for employee severance pay expenses and related cash expenditures and $24 million for exited facilities. Two thirds of the facilities costs were attributed to non-cancelable lease costs while the remainder was related to the write-off of tenant improvements, furniture and fixtures.

The company estimates those same costs in 2009 will amount to between $40 million and $55 million. The total includes between $35 million and $45 million for non-cancelable lease costs, relocation costs and the write-off of tenant improvements, furniture and fixed assets as the Company continues to exit facilities, and between $5 and $10 million related to workforce reductions.