We determined to relocate. During the search for new lease space, I remember visiting a potential site in Burlingame and being told that the space was designed specifically for the dot-com industry and that the developer had no interest in entertaining a lease with, of all businesses, a nonprofit professional organization. There were a few one-year subleases available, but we were worried that the lease situation would grow worse, and rates would continue to rise. Little did we know. The landlord at "400" wanted us out of the space on the top floor of the building, anticipating that the space would attract a new tenant paying three-to-four times what SMCMA had been paying.

We agonized over taking a one-year sublease or entering into an amended lease with the "400" property owners on a lower floor. Fearing lease rates would continue an upward spiral, we opted to enter into a five-year lease at the much higher rate.

Within months of executing the new lease, the commercial real estate market fell apart. How tragic to be faced with an extremely high lease term when as few as six months into the new lease the market for Class A Building space crashed. Where landlords had been getting as much as $7.00 to $8.00 a square foot prime commercial leases, by year-end lease terms were going begging at $1.00 to $1.50 a square foot! Over the intervening years, the market slowly righted itself and rents gradually have been increasing.

During 2005, when we knew the lease at "400" was finally nearing its end, we started looking at sites to purchase. We looked at a number of potential sites, but none were ideal either because of the extensive cost of bringing them up to ADA compliance, the buildings were located in a semi- industrial area, or because the cost of such a building was out of our reach. We also were disinclined to take on the risk of buying a building larger than our needs and getting into the landlord business.

After searching much of the year, as fall approached, we saw the handwriting on the wall and turned to lease options. The Executive Committee looked at sites over the mid-Peninsula area from sites off West Hillsdale, to San Mateo-Foster City areas, and Redwood Shores. Finally three sites were selected and proposals went out to each of the landlords. One of the two building owners did not respond to our proposal since a larger tenant had come forward who was willing to occupy a greater amount of space than SMCMA needs, thus we ended up with two possibilities. We finally selected a site on the San Mateo-Foster City area, near the Bridgepoint Shopping Center. The building, 777 Mariners Island Building, the former home of Franklin-Templeton, is now owned by Keynote Systems, an e-business performance management services company. The new space will be on the ground floor in the area that formerly operated as Franklin-Templeton Bank. Tenant improvements need to be made, so, fortunately for us, we will be vacating our El Camino space at the end of February and occupying temporary space on the ground floor of the new site while tenant improvements are made to Suite 100, SMCMA’s new location.

We are very excited that the new location will offer a large new tenant conference room for 25 persons, and an auditorium is available for tenant use, which seats about 120, a holdover from the Franklin Investment days.

You will be invited to an open house to welcome and introduce physicians to SMCMA’s new home once we are in the final location, probably about May. In the meantime, as mentioned previously, we will be operating temporarily out of Suite 150 at 777 Mariners Island Blvd, San Mateo, CA 94404. See you soon.