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1 RiversideCA.gov
SIXTH AMENDMENT TO LEASE
AGREEMENT– MORGAN STANLEY
SMITH BARNEY FINANCING LLC
City Council
September 5, 2023
Riverside Public Utilities
RiversideCA.gov
2 1. On October 13, 2015, the City acquired the Mission Square Building at 3750 University Avenue (Property),
which was funded by Riverside Public Utilities (RPU).
2. On October 7, 2015, a Fifth Amendment to the Lease
Agreement with Morgan Stanley Smith Barney was
approved with an effective date of August 1, 2015.
3. Morgan Stanley Smith Barney has been a tenant in the Property since 1999 with their current Agreement expiring on August 31, 2025.
BACKGROUND
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3 1. Term: September 1, 2025, to February 28, 2027.
2. Premises: Approximately 5,738 rentable square feet of space located at 3750 University Avenue, Suite 600.
3. Base Rent Schedule (Modified Gross Lease):
PROPOSED 18-MONTH LEASE TERMS
Period Monthly Base Rent
09/1/2025 – 09/31/2025 $0.00 (Abated Rent)
10/1/2025 – 08/31/2026 $18,074.70
9/1/2026 – 02/28/2027 $18,591.12
RiversideCA.gov
4 4. Reduction of Premises: Lessee is su rrendering a portion of the existing premises which consists of approximately, 1,324 rentable square feet.
Lessee’s current rentable square footage is 7,062, and the Premises will be downsized to a total of 5,738 sf.
5. Lessee’s Proportionate Share: Effective as of the Retained Premises Effective Date Lessee’s Share of Op erating Expense Increase shall be reduced to 4.6%.
6. Base Year: Effective as of the Extended Term Commencement Date (i.e., September 1, 2025), the term “Base Year” as defined in Section
4.2(b) of the Lease is adjusted to calendar year 2026.
PROPOSED 18-MONTH LEASE TERMS CONT.
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5 7. Lessor’s Work: (a) Lessor, at its sole cost and expense, shall be responsible for the permitting, performance and completion of all work associated with Lessee’s surrender of the Surrender Space and continued occupancy of the Retained Space.
8. Lessor's Work: (b) Without limiting the generality of the foregoing description of Lessor's Work, Lessor's Work shall also include additional items outlined in the Amendment, at the Lessor's sole cost and expense and may be accomplished through an agent.
9. Parking: Lessee shall be entitled to rent and use up to a total of twenty- three (23) parking spaces one (1) time per year, upon sixty (60) days' advance written notice to Lessee.
PROPOSED 18-MONTH LEASE TERMS CONT.
RiversideCA.gov
6 10. Signage: Lessee has an existing right to install building-top signage on the Building ("Building-Top Signage") in the location referenced in Section 10 of the Fourth Amendment and identified on Exhibit B to the Fourth Amendment ("Building-Top Signage Location").
11. Options to Renew: (1) One (5) five-year option to extend from March 1, 2027 to February 29, 2032.
12. Broker: Pursuant to the existing Exclusive Authorization to Lease Agreement with Newmark Knight Frank (NKF), City to pay Jones Land LaSalle (JLL) Tenant’s broker a fee equal to 4% of the lease consideration in the amount of $12,415 and NKF a leasing commission equal to 2.5% of the lease consideration in the amount of $7,759 for a total commission of $20,174.
13. Other: All other terms of the original lease, the First, Second, Third, Fourth and Fifth Amendment shall remain unmodified and in full force.
PROPOSED 18-MONTH LEASE TERMS CONT.
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7 Strategic Priority 3 – Economic Opportunity
Goal 3.3 – Cultivate a business climate that welcomes innovation, entrepreneurship, and investment.
Cross-Cutting Threads
STRATEGIC PLAN ALIGNMENT
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8 That the City Council:
1. Approve a Sixth Amendment to the Lease Agreement with Morgan Stanley Smith Barney Financing LLC to extend the Lease Agreement for an additional eighteen-month term from September 1, 2025, to February 28, 2027, with an option to extend for an additional five-year term;
2. Authorize the City Manager, or designee, to execute the Sixth Amendment to the Lease Agreement, including making minor, non-substantive changes, and to sign all documents and instruments necessary to complete the transaction.
RECOMMENDATIONS
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