Starboard Successfully Leases Two Buildings in Highest Vacancy Area

Starboard has announced that with the signing of its most recent deal at 1663 Mission Street, it has successfully brought 1663 Mission Street to over 90% leased. In addition, leases are being concluded at 1661 Mission Street that will bring that building to 100% leased. These two buildings are located in between two of the highest vacancy sub-markets in San Francisco (South of Market and the Mission District). With office vacancies in the mid-30’s, Starboard was able to come up with a marketing strategy that attracted tenants to these buildings in the face of these high numbers.

At 1663 Mission Street, the ownership had a number of problems to overcome. First, the soft office market. Second, each floor leased required major upgrades to meet current codes. Third, the buildings were not located in the most desirable of areas.

Starboard convinced the landlord that in order to lease the building they needed to offer prospective tenants a low base rent with the option to create their own design and layout of their space based upon a standard improvement package that would be added on to the base rent as additional amortized rent. By doing so the tenant could control his ultimate rent by controlling how much he wanted to spend on their build out within their space.

Secondly, the owner was flexible on the length of lease. By allowing tenants to secure longer leases the amortized rent portion became smaller thus allowing for even lower rent.

Third, the owner was willing to create smaller suites, as small as 1,500 square feet to meet today’s tenant profile of smaller tenants. In just under six months, Starboard has leased over 30,000 square feet involving eight transactions.

Starboard, through its unique web site advertising, is attracting tenants that typically may not find properties such as 1661 and 1663 Mission Street. Supporting over 15 web sites, Starboard attracts over 17,000 visitors to their sites each week. This approach has allowed their building owners to enjoy leasing activity in the face of such a depressed market and has allowed Starboard to grow over 30% in leasing transactions in over one year.