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SAN FRANCISCO-A 171,000-sf office building here being vacated by Wells Fargo at the end of the month has been scooped up by the city’s largest hospital, California Pacific Medical Center, which signed a 10-year lease for the entire building. Built in the mid-1960s at 633 Folsom St. and renovated twice in the 1990s, the seven-story structure is owned by Swig Co., a locally based real estate company.

CPMC says it will begin moving some of its administrative operations into the building early this year. While the negotiated lease rate was not disclosed local industry sources tell GlobeSt.com that CPMC likely received a break from the asking lease rate of $45 per sf per year because it will occupy the space largely as is, saving the building owner the cost of tenant improvements, which are typically built into the asking rate. At $40 per sf, the value of the lease would be approximately $68 million.

The lease is related to CPMC’s effort to comply with state seismic requirements by 2013. A CPMC source tells GlobeSt.com that the lease will allow the hospital to consolidate a good portion of its administrative operations in a single building while also freeing up other locations for redevelopment.

For example, the source says CPMC houses several of its departments–communications, marketing, development and its philanthropic arm–in the Cathedral Hill Hotel at Van Ness Avenue and Geary Boulevard, which it hopes to raze and replace with a new $1.7-billion hospital that meets the new seismic requirements. Additional CPM departments housed in leased offices around the city also will relocate to 633 Folsom, which based on 250 sf per person could house close to 700 employees.

“This will consolidate some of our departments under one roof, which is important for us,” the source says. “When people are scattered it’s harder to communicate.”

The lease is one of the biggest in San Francisco in the past 12 months. Other large leases in the past year include Bank of America’s 180,000-sf renewal at 600 Montgomery and Google Inc’s 210,000-sf lease at 345 Spear St.

Gary Arabian, Angus Scott and Jenny Haeg of CAC Group represented the landlord. Ed Irwin of Healthcare Real Estate Services and Bill Walsh of CB Richard Ellis represented CPMC.

Wells Fargo & Co. has occupied the office building for the past 10 years.

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