A Denouement of the Dot-Com Bubble

A major office building on the San Francisco Peninsula was just sold. The San Francisco Business Times reported that Inktomi is to purchase their "Bayside" headquarters in Foster City for $114 million, or about $435 per square foot. The two building complex has 262,000 square feet and was originally let to the firm for about $80 per square foot per year. A covenant of the synthetic lease contained an obligation to do so if Inktomi failed to meet a minimum level of profitability. The headquarters was leased in April, 2000 when the company was increasing headcount by 72% annually, but at this time employs 270, down from its high of 1,300. The space completed in January, 2002, has never been occupied and the buildout was not reported. The property is reported to be available "to the highest bidder", and to have been on the market "for awhile". It is also reported that the seller, Equity Office Partners, may buy back the property for $37.5 million, or about $143 per square foot, with a portion of the proceeds coming from forgiveness of a termination payment related to Inktomi's lease in the Parkside office complex.

More information can be obtained at the following sites.

http://www.inktomi.com/company/news/press/2002/realestate.html

http://www.bizjournals.com/sanfrancisco/stories/2002/09/02/daily53.html

http://biz.yahoo.com/djus/020906/1503000513_1.html