03-13-2017 BPU RPT 07 - Laserfiche WebLink

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W A I R h N h B U Y I. I F F -- RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: MARCH 13, 2017 ITEM NO: 7 SUBJECT: OPERATIONS UPDATE ON MISSION SQUARE PROPERTY LOCATED AT 3750 UNIVERSITY AVENUE ISSUE: Receive and file an update on operations at Mission Square at 3750 University Avenue. RECOMMENDATION: That the Board of Public Utilities receive an update on operations at Mission Square at 3750 University Avenue. BACKGROUND: On October 13, 2015, the City acquired the Mission Square Office Building at 3750 University Avenue (Property), which was funded by Riverside Public Utilities (RPU). As such, the City is now the Landlord of the Property. The Property consists of approximately 127,533 square feet of rentable office and retail space in a six -story building, plus a basement level and a 490 parking stall garage situated on approximately 2.5 acres of land. On January 26, 2016, the City Council approved an Exclusive Authorization of Lease Agreement with Newmark of Southern California, Inc. dba Newmark Grubb Knight Frank (NGKF) to provide broker -leasing services for the Property. RPU staff has been coordinating the leasing process for the Property with the Real Property Services Division of the Community & Economic Development Department and NGKF as the broker for the Property. On January 26, 2016, the City Council approved a Property Management Agreement with NGKF to provide property management services for the Property. RPU staff has been coordinating the property management process for the Property with the Real Property Services Division of the Community & Economic Development Department and NGKF as the building manager for the Property. DISCUSSION: LEASING The current occupancy rate at the Property is 92.8%. Below is a review of each suite and current tenant or leasing interest: 1. Suite M — L' Bistro recently vacated the 1,000 rentable square foot space in January 2017. The lease expires on July 31, 2019 and staff is working to negotiate an amicable settlement agreement with L' Bistro. NGKF is actively marketing the space for lease. There has been some preliminary interest for a deli/convenience store and an espresso coffee shop.