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FOSTER CITY, CA-The new owners of the 400,000-sf Parkside Towers office complex here have refinanced the asset with a $92-million loan from MetLife, according to Northmarq Capital Inc., which arranged the loan. Northmarq says the transaction was structured to accommodate the expansion of the lead tenant, Rearden Commerce, which is being phased in over the next year.

The property owner is a joint venture of Harvest Properties Inc. of Emeryville, CA, and Invesco Realty Advisors of Dallas. The duo paid $180 million ($450 per sf) for the asset earlier this year. The seller was a 90-10 partnership of Sterling American Property and Hines.

The new first mortgage financing was based on a six-year term with two years interest only followed by a 30-year amortization schedule, according to Northmarq. The company’s San Francisco-based SVP and managing director Dennis Williams arranged the loan.

In January, while the property was under contract, Rearden Commerce Inc. tripled its leasehold at the complex. The creator of the first online personal assistant leased 91,363 sf on sixth, seventh and eighth floors of 1001 E. Hillsdale Blvd. to complement the 41,706 sf it leased late in 2006 on the sixth floor of 1051 E. Hillsdale Blvd.

The Rearden lease brought the property to full occupancy two years after it had been largely vacant. Parkside Towers was master leased before its 2002 completion by Inktomi, a data retrieval company that never even began space planning before agreeing to pay $54 million to terminate the $315-million lease obligation. Shortly thereafter, it agreed to be acquired by Yahoo Inc. for $235 million.

The Sterling-Hines JV acquired Parkside Towers in mid-2005 as part of an unstable five-building, 1.7-million-sf portfolio from Equity Office Properties for which it paid approximately $397 million ($83 million was allocated to Parkside Towers). The other properties were 405 Howard St., 301 Howard and 120 Montgomery, all in San Francisco, and San Rafael Corporate Center. The JV has since sold three of the properties (San Rafael Corporate Center, 405 Howard and 301 Howard) for $466 million.

With one tower still in shell condition, Parkside Towers was the least stable asset in the portfolio. The two-building development in the 1000 block of East Hillside Boulevard was just 16% leased two years ago. Thanks to a busy 2006 and early 2007, the property is now full. New tenants include IBM, which leased 60,000 sf in July, and Acxiom, which leased 52,000 sf in May. Other tenants include Sling Media, MarketLive and Quinstreet.

The value of the Rearden expansion was not released by the parties involved. As of mid-year 2006, just before the IBM lease being signed, the asking triple-net lease rate for space in Parkside Towers was $2.95 per sf. The rate assumed a lease term of at least a five years and a $50-per-sf tenant improvement allowance.

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