By Meghan Hall
Just as AT&T is looking to sublet a large chunk of space in San Ramon’s Bishop Ranch Business Park, Five9 is expanding, solidifying its plans to make the development its formal headquarters. According to SEC filings dating to the beginning of August, Five9 signed a lease for 104,253 square feet of office at 3001 Bishop Drive. The lease will begin on February 1, 2021 and will lease the space for a period of 120 months.
Currently, the company is located at 4000 Executive Parkway, also in the Bishop Ranch Business Park. Five9 has been slowly expanding there over the course of the past eight years and now occupies about 90,000 square feet of space. Including its new leases, Five9 will occupy nearly 200,000 square feet of space.
Initial base rent for the expansion will be just under $365,000, or about $3.50 per square foot per month, with eight months of rent abatement, according to the SEC filing. A tenant improvement allowance of $4.17 million was also negotiated. Five9 will occupy about 22 percent of the building, upon beginning the lease, and is located in BR2600, a larger connected building with four distinct wings.
Brokerage firm JLL represented Five9 in the transaction.
The building has been owned and managed by Sunset Development for over 30 years, and is designed to accommodate 8,000 employees spread out amongst two million square feet of space, states 2600 Bishop Ranch’s website. The building itself features 100,000 square foot floorplates, and the building sits at the heart of the 585-acre campus. The Shops at Bishop Ranch, a 98,000 square foot shopping center anchored by retailers such as Whole Foods and Macy’s, is located nearby. A 150,000 square foot amenity hub, featuring restaurants, cafes, conference center and 330-person auditorium, is also part of the development.
“Of course, calling it an “office park” does little justice to what Bishop Ranch really is: An exciting leap forward in the evolution of the workplace,” states Alexander Mehran Jr., President and COO of Sunset Development Company, on the project website. “Built from the ground up with the highest attention to quality and sustainability, Bishop Ranch offers a unique environment in which businesses can grow and thrive.”
BR2600 is also home to Chevron, SAP, Accela, and until recently, AT&T. Five9’s newest lease came just as AT&T’s Mobility Services Group placed 335,839 square feet at the same development up for sublease. The building, located at 5001 Executive Parkway, also located in BR2600. The sublease would run through December 31, 2028.
According to a second quarter report released by JLL, suburban markets and developments such as BR2600 are well-poised to attract the location of companies looking to open satellite offices. These offices, intended to be less dense and closer to employee bases, are one of the many distributed work options under consideration. However, that trend has yet to emerge. During the second quarter, 180,000 square feet of office space hit the sublease market in the East San Francisco Bay Area as companies re-evaluated their space needs. As of July, there was nearly one million square feet of sublease vacancy in the East San Francisco Bay Area. Average asking rents remained stable at $3.20 per square foot per month, as landlords sought to maintain base rents but offer higher levels of concessions in an effort to attract the attention of tenants. How these fundamentals will shift in the coming months is unclear, as Bay Area cities attempt to figure out the safest way in which to reopen.