The new lease commences sometime in the second half of 2010 at an annual rate of $28.09 per lettable square foot, which is 197,470 square feet, according to the GSA. The rate remains constant throughout the lease term, which does not include any rights to expand or cancel.

When it commences, the new lease will supersede the current 10-year lease. Set to expire in November 2010, the current lease is costing the GSA $4.78 million per year or, based on the same lettable square footage, $24.20 per square foot.

The asking full-service lease rate for class A building in Downtown Sacramento is $$31.20 per square foot, according to a mid-year report from Cornish & Carey Commercial that pegged Downtown class A vacancy at 12.92% or 936,000 square feet.

The building owner is UrbanAmerica LP, a minority-controlled real estate private equity fund whose investors are primarily public and private pension plans. It acquired 1325 J St in December 2008 along with 12 other office buildings and a distribution center for $485 million. The rentable square footage in the deal was approximately 3.1 million.

Last week's announcementof the lease by UrbanAmerica did not include the negotiated lease terms and UrbanAmerica declined to reveal the information. The GSA subsequently proved the information to GlobeSt.com upon request.

Timothy Hutchens, Jim King and Ali Nadimi of CB Richard Ellis Inc. represented UrbanAmerica in the transaction.

Instant Insights /

Army Corps of Engineers Lease Totals $55M

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