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REDWOOD CITY, CA-Merced System is moving its headquarters across the street. Currently headquartered in about 10,000 sf at 330 Twin Dolphin Dr., the provider of software for contact center performance management has leased 27,776 sf across the street at 333 Twin Dolphin Dr.

Merced’s existing headquarters is owned by a group of investors who made their money working at Oracle. Its new space is owned, leased, and managed by Equity Office Properties Trust.

Merced’s broker, Jere Hench of Wayne Mascia Assoc. tells GlobeSt.com that Merced signed a five-year deal. He declined to reveal the negotiated lease rate. Other brokers familiar with the transaction tell GlobeSt.com that the market rate for class A space in Redwood Shores between $2.20 and $2.30 per sf per month on an effective full service basis, and that EOP probably attracted Merced by offering a better-than-market rate.

Merced CFO David Wittenkamp tells GlobeSt.com that in addition to nearly tripling its leasehold in response to 300% growth over the last two years, the company is improving its view. Instead of the ground level as is currently the case, it will be on the fifth floor of EOP’s building, which tops out at seven stories.

More importantly, however, Wittenkamp tells GlobeSt.com that the new space is more appropriate for his clients. “We’ve been in our current space since our inception in 2001, gradually expanding,” he says. “We finally got to the point where both in terms of people and physical security parameters it didn’t meet what our clients expect and require.”

Merced Systems will be relocating approximately 65 employees in January 2006. This lease brings 333 Twin Dolphin to 92% leased. EOP acquired the bilding in July with the goal of becoming the submarket’s dominant landlord.

“Redwood Shores has become a primary focus for Equity Office’s Peninsula portfolio,” says Mark Geisreiter, a senior vice president with EOP in San Francisco. “With the recent purchase of 333 Twin Dolphin, we have secured a leading ownership position in the area–currently owning approximately one million square feet of a four million square-foot submarket.”

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