SUBSEQUENT EVENT

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENT

SUBSEQUENT EVENT

On November 2, 2018, we entered into an office lease agreement with Google LLC (“Google”), as tenant, at the Landmark at One Market for approximately 235,574 rentable square feet (the “Landmark Lease”).   The initial term for the Landmark Lease is anticipated to commence on January 1, 2019 with an anticipated initial expiration date of December 31, 2029, subject to two options to extend for a period of five years each.   Portions of the premises leased to Google under the Landmark Lease are anticipated to be delivered to Google in separate tranches, on January 1, 2019 and July 1, 2019. The annual base rent under the Landmark Lease (calculated in accordance with GAAP) is anticipated to be approximately $14.4 million in 2019 and $23.6 million each subsequent year of the initial lease term.

Additionally, on November 2, 2018, we entered into an office sublease agreement with Google, as subtenant, for approximately 17,624 rentable square feet at the Annex (the “Annex Sublease”), a six-story building adjacent to Landmark at One Market, in which we are a tenant under a long-term master lease with an affiliate of the Paramount Group (“Paramount”). The initial term for the Landmark Lease is anticipated to commence on July 1, 2019 with an anticipated initial expiration date of December 31, 2029, subject to two conditional options to extend for a period of five years each.   The premises leased to Google under the Annex Sublease is anticipated to be delivered to Google on July 1, 2019. The Annex Sublease is conditioned upon Paramount's consent. The annual base rent under the Annex Sublease (calculated in accordance with GAAP) is anticipated to be approximately $0.6 million in 2019 and $1.3 million each subsequent year of the initial lease term.

In connection with the foregoing and subject to certain conditions, we agreed to pay Salesforce.com, Inc. (“Salesforce”) a lease termination fee in the aggregate amount of approximately $2.9 million for the early surrender of certain of the premises currently leased by Salesforce at Landmark at One Market and the Annex. The useful life of assets related to the Salesforce lease and sublease at Landmark at One Market and the Annex, respectively, will be adjusted to reflect the remaining lease terms.