SAN FRANCISCO-Last year, Gap Inc. leased a 283,000-sf building in Catellus Development Corp.’s Mission Bay Project. Gap’s Mission Bay space, which will be completed next year, was leased in addition to the 540,000-sf headquarters the company is building at 250 Embarcadero, which will also be completed next year.

However, the Gap’s earnings have been declining over the past two years and the company cannot afford to pay additional rent for space it may not need. So the clothing manufacturer has put the Mission Bay building on the sublease market.

Catellus Development Corp. will not lose in the deal, as the Gap’s 15-year lease says that it will pay the rent regardless of whether it occupies the space or not. Still, this means that the developer has few tenants lined up for the commercial part of the Mission Bay project.

Although the lease rate was not disclosed, the average asking price at the time of the lease signing was $55 per sf. The price has lowered significantly since then, which may present a problem in finding a sublessor to take over the large space.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.