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Broker's Deals Validate High-Profile Projects
San Francisco Business Times
James Temple, 
2002
San Francisco Chronicle
Gerald D. Adams, 

 

Broker's Deals Validate High-Profile Projects
James Temple,
San Francisco Business Times, Friday, March 28, 2003

At the outset of last year, Rob Paratte faced a daunting task.

Three high-profile commercial projects developed by his company, Wilson/Equity Office LLC (a then-joint venture between the former William Wilson and Associates and Equity Office Properties), were coming online amidst the biggest office glut the Bay Area had ever witnessed.

The developments, the new Foundry Square II, the San Rafael Corporate Center and the Ferry Building renovation, were scheduled for completion in September, May and December, respectively. And there was only one lease signed among them.

It was Paratte's job to get the over 700,000 square feet of office space filled in a market where any tenant with less than two years on their lease enjoys the attentions of almost every other landlord in town.

"It was an immense challenge. We had no tenants signed and we had two buildings that were not nearly complete," said Paratte, referring to the San Francisco projects. "It's hard to convince a company that they have to leave their current offices, when you're standing on a slab of concrete with no building shell."

Nevertheless, by the close of the year, he helped seal 172,000 square feet of office leases at the properties. Some brokers signed bigger leases this year and some landed more, but the significance of Paratte's deals, as validation of a new south of Market building and a restored San Francisco landmark, made Paratte the San Francisco Business Times' 2002 Deal Maker of the Year.

Or at least the half year.

After the first two quarters of 2002, Wilson Equity's situation still appeared dire, which is to say nothing had changed save for the empty buildings moving closer to completion.  The tide finally began to shift at the end of September, when CNA Insurance signed a 54,000-square-foot lease at Foundry Square II, a glass building at 405 Howard St. More promising news soon followed at the 10-story tower, with Flack + Kurtz signing a letter of intent in October. Gordon H. Chong followed suit in November.

"We moved aggressively to close those deals," said Paratte. "Unfortunately that's a funny term, because in this market, the tenants hold all the cards. It means being available and returning all the calls, and helping tenants with their due diligence."

But it worked, as Flack + Kurtz signed a 22,000-square-foot lease in December, and Gordon H. Chong signed a 43,254-square-foot lease in January 2003.

Meanwhile, in mid-October, law firm Coblentz, Patch, Duffy and Bass and financial firm Stone & Youngberg both signed letters of intent for the renovated Ferry Building, which has 175,000 square feet of office space on either side of the restored nave and a planned open-air market on the ground floor. The office space is represented by John Cecconi and Steven Anderson of The CAC Group, in conjunction with Paratte.

The partnership capped what began as an inauspicious year with an official 73,000-square-foot lease for Coblentz in November, one of largest deals in San Francisco last year, and a 33,000-square-foot deal with Stone & Youngberg in December. Taken with one smaller deal, that means there's only around 57,000 square feet of office remaining, and Paratte expects it to be filled by this summer.

Along the way, Paratte helped to close a half-dozen deals at the San Rafael Corporate Center, a 115,000-square-foot office project, making it 22 percent leased by December.

The question is how Paratte et al closed so many deals in a market that was so bad, with almost every landlord in town vying for the same tenants?

Paratte is quick to give credit to the projects themselves, and by extension, his bosses at Equity and Wilson Meany Sullivan.

"The overwhelming top consideration was the design of the projects," he said, specifically highlighting the Ferry Building and Foundry Square. "They're both quality projects and they're unique."

But he allows that dealmaking is a subtle craft, where the personal things matter, from returning a call on time to keeping a project's architectural arcana at his finger tips.

Giving a tour through Foundry Square II, Paratte points out a litany of details that one might stroll by unawares: The night-time lights that highlight the lines of the rooftop, the "soaring" 11-foot, 3-inch ceiling height, the double-glass panes that make the building energy efficient, the floor plates that allow cabling and heating systems to be tucked away, and the fact, and significance, of natural light coming in from all directions.

On the one hand, it's obviously marketing. On the other, it's obvious that Paratte believes in what he's selling.

He says as much himself.

"You have to have passion for the projects you're marketing to understand the details and be able to point them out," he said. "It's overwhelming for a tenant to walk in and look at a lot of empty space, so it's a process of pointing out details and piquing the imagination of the decision maker."

It seems Paratte continues to do so in 2003. In March, law firm Orrick, Herrington & Sutcliffe LLP signed a 15-year, 157,000-square-foot lease at Foundry Square II, the largest new San Francisco lease since 2000. The deal means Foundry Square II is now 55 percent full, but it was a blow to Boston Properties' Old Federal Reserve Building, which the firm had occupied for 14 years.

The day after Paratte secured the lease, Orrick partner Dora Mao walked over a green baseball hat emblazoned with the firm's logo.

"I'm going to put this on and walk around the Embarcadero Center," he said with a smile, making reference to the flagship building of Boston Properties.