Morgan Stanley Smith Barney has signed a 10-year lease for 23,000 square feet of premium office space at a year-old building in Santa Rosa’s Fountaingrove Executive Center.
The 63,000-square-foot office building on Round Barn Circle is now nearly 82 percent occupied, according to its owner, Basin Street Properties of Reno, Nev.
Morgan Stanley, a wealth management company, is consolidating staff from two offices into one, said Basin Street Vice President Scott Stranzl. The company, he said, joins other “top tier companies” at the office building, including Pisenti & Brinker, Prosight Specialty Insurance and RBC Wealth Management.
The success in attracting tenants shows that local companies remain interested in leasing premium, or Class A, office space, Stranzl said. Such properties, he said, typically are the last in economic downturns to lose tenants and the first gain them in recoveries.
The Fountaingrove property’s features include its hillside location and views, premium materials and finish work and energy-saving additions, he said. The building also has showers, lockers, outside decks and 24/7 key card access.
“It’s newer, brighter, more efficient,” Stranzl said.
The lease begins in February 2011. Terms of the lease were not disclosed.
Sonoma County continues to have a large volume of empty office space. The county’s vacancy rate fell slightly to 22.7 in the third quarter. That compares to 23.8 percent in the second quarter and 23 percent for the third quarter of 2009.
But Stranzl and other landlords have said that much of that vacant space is functionally obsolete, partly because so many of the buildings were designed for large high-tech companies that no longer remain in operation here. They have suggested the buildings may remain vacant for years without costly renovations to make them attractive to smaller businesses.
Shawn Johnson, a managing partner at Keegan & Coppin, served as Basin Street’s leasing agent for the new lease. He said more companies are taking advantage of good deals to move to nicer locations.
Such moves, he said, will serve as “the base of better things to come in 2011.”
— Robert Digitale