Bonus Commissions Are Back?
We just learned that Equity Office is offering $3/SF bonus fees for full-floor deals at two of its properties (919 and 989 @MetroCenter in Foster City and Peninsula Office Park in San Mateo). The bonus is not because of any weakness in the overall market—just lack of velocity in the larger size range in the county's central and northern areas, notes Avison Young's Tim Grant. His firm pointed out some of San Mateo's problem areas in a report earlier this year. Throughout San Mateo and Foster City there are currently 16 buildings with a total of 32 full-floor opportunities available from various owners, Tim says.
The $3/SF incentive is also probably reflective of the fact that Equity has several large blocks it would like to fill in that submarket, and it may not be seeing as many tours as it would like, he says. We hear $3 is more than usual ($1 and $2 bonuses happen). But in the big picture of the cost of making a deal, it's a small investment to get more interest in your property, Tim says.