SEATTLE, CA-The Boeing Co. has signed extensions for two leases totaling 312,000 sf at airport-area facilities in Seattle and Los Angeles, both without rent increases.
The aerospace giant signed a five-year extension for 211,000 sf of office space at Kilroy Airport Center-SeaTac and 101,000 sf at Kilroy Airport Center-El Segundo, Calif., according to Los Angeles-based Kilroy Realty, owner of the buildings.
The Seattle lease, at 17930 Pacific Highway South, was due to expire at the end of this year. Under the terms of the extension, Boeing has the right to terminate the lease at Dec. 31, 2005 and Dec. 31, 2006. The El Segundo lease, at 2240 E. Imperial Hwy., formerly ran until Jan. 31, 2004 but now runs until Jan. 31, 2006.
Kilroy said both extensions were at rents “approximately equal to the rental rates Boeing is currently paying on the existing leases,” but the real estate investment trust did not specify those rates. According to Kilroy’s latest 10K report, rent is $11.29 per sf per year at the Seattle location and $18.03 per sf per year at the El Segundo facility.
The lease extensions are the latest in a series of real estate moves by Boeing, which is Kilroy’s largest tenant, renting approximately 1.1 million sf of office space under 10 separate leases. Boeing’s leases represent approximately 9.8% of Kilroy’s total annual rent revenue, according to the REIT’s latest quarterly report. Earlier this year, Boeing announced that it will vacate 248,000 of office space at another Kilroy building in El Segundo when that lease expires in February. The remaining Boeing leases with Kilroy are scheduled to expire at various dates between January 2004 and March 2009.
The two-year lease extension in El Segundo is typical of a corporate move that has become more common in recent months as companies opt for shorter leases or extensions while they decide on future real estate plans. Landlords are willing to grant the shorter terms because of the weak leasing environment.
Boeing extended for only two years in El Segundo because “we’re assessing all of our facilities, so we took two years to give us some planning time,” company spokesman George Torres tells GlobeSt.com. The El Segundo facility houses administrative offices and light assembly operations of components for Boeing’s Satellite Systems division.