CITY OF SAN MATEO
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 5 Section Name: CONSENT CALENDAR Account Number: 14-1311 File ID: 26-10880 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: City Manager's Office
MEETING DATE: February 23, 2026
SUBJECT:
Commercial Property Management — Agreement
RECOMMENDATION:
Approve an agreement with Prodesse Property Group, in an amount not to exceed $125,000 for a term from March 1, 2026 through February 28, 2029, with an optional two-year extension, to manage City-owned properties and authorize the City Manager to execute the agreement in substantially the form presented.
BACKGROUND:
The City owns and manages eight commercial properties in the Downtown. Tenants at the Main Street Garage include Beard Papa’s, Cold Stone Creamery, Fletch’s Taqueria, and Anton’s Patisserie, with one additional space currently vacant.
Rise Woodfire Pizza is the primary tenant at the Transit Center and there is also one vacant space at that location. The Century Theatres is the long-term ground lessee on the block of B Street between 2nd and 3rd Avenues. The Downtown commercial property management contract excludes the ground lease with Century Theatres, as it is managed internally by staff.
In September 2025, the City issued a Request for Proposals (RFP) for commercial property management services and received a high level of interest, along with several competitive proposals. Following a competitive review, staff selected Prodesse Property Group as the City’s commercial property manager based on its property management expertise, customer service record, competitive rates, and ability to provide sound solicited and unsolicited advice about the commercial rental market.
Headquartered in San Mateo, Prodesse Property Group has 30 years of experience in property management and specializes in providing comprehensive property management services. The firm manages extensive residential investment properties and more than 250,000 square feet of retail, light industrial, medical-dental, and office space throughout the Bay Area. Michael Pierce, President, and Gilbert Sanchez, Commercial Portfolio Manager, are the principals of the company. Prodesse is currently on contract with the City and is familiar with the City’s property portfolio, including recurring conversations, and knows its current tenants and leasing documents. These factors combined with their experience, expertise, and pricing make Prodesse a sound choice from those who responded to the RFP. More information on pricing is described below.
The agreement includes an initial three-year term, with an option for one two-year extension. Prodesse submitted the most cost-effective proposal among the RFP responses and received the highest overall score for service. The management fee would continue at six percent (6%) of collected monthly gross income (base rent and CAM) from all managed properties and spaces, or a minimum of twelve thousand dollars ($12,000) annually, whichever is greater, and would be deducted from collected rental revenues.. In addition to the management fee, the agreement includes leasing and renewal fees, a per-unit monthly data access fee to cover software and data costs, and a construction management fee for projects
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exceeding $25,000 to account for additional staffing and oversight administered by Prodesse. Such repairs would incur an administrative cost born by the City should they occur; however, this has not occurred in staff’s experience and is not expected, as major property repairs to City property would typically be administered by the City.
BUDGET IMPACT:
Although the agreement authorizes a total amount not to exceed $125,000 over the term, no net budget impact is anticipated, as the costs paid to Prodesse are deducted from rental revenues collected for City-owned properties.
ENVIRONMENTAL DETERMINATION:
This agreement is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Proposed Agreement
STAFF CONTACT
Jennifer Chen, Economic Development Manager
[email protected]
(650) 522-7009