SANTA CLARA, CA-WebEx Communications Inc. has signed a 10-year lease for 161,000 sf in Mission Tower II, a 283,000-sf class A office property on Highway 101 at Great America Parkway. The San Jose-based Web conferencing company plans to consolidate its operations into the 12-story building. The lease commences January 2005.WebEx currently leases 126,000 sf in three buildings in San Jose that are used for sales, engineering, support, network operations, and general corporate functions, including its corporate headquarters. The lease terms for two of the buildings expire in September 2004. The lease for the third building — its current headquarters, located at 307 West Tasman Dr. and owned by Sobrato Cos. — runs through February 2008. Sources tell that WebEx will put that building on the sublease market once it relocates to Mission Tower II.The six-year-old Mission Tower II is owned by a 50-50 joint venture of San Francisco-based Westbrook Real Estate Partners and Palo Alto, CA-based Divco West’s Page Mill Properties Fund. The joint venture acquired the property last summer from PMC-Sierra Inc., which bought the building from the developer in order to get out of its lease commitment. The building was developed in 1998 by WHTS Freedom Circle Partners LLC, a joint venture of Tishman Speyer, Travelers Real Estate Venture and Whitehall Street Real Estate Limited Partnership IX. Mission Tower I, still owned by the Tishman Speyer joint venture, is fully leased to Sun Microsystems and PMC.John Condrey of Colliers International in San Jose represented WebEx in its lease negotiation. Phil Mahoney of Cornish & Carey Commercial represented the building ownership. None of the parties involved in the transaction would discuss the negotiated lease rate, however; local brokers familiar with the property and the region say the going rate for that type of newer, class A space is between $2.00 and $2.50 per sf per month. At the lower end of that range, the value of the lease would be more than $38 million.Earlier this year, WebEx acquired a 125,000-sf building on nine acres in Mountain View, CA, for $16 million. According to a recent SEC filing, the company plans to use the building primarily as a switching center facility to accommodate the growing usage requirements on its WebEx MediaTone Network.

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