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generated by the 1984 lease or the 1987 lease of portions of the
property by the County of San Mateo.
Carneghi determined that the rental rate of the Jacobs lease
was $.27 per square foot, net of expenses. Carneghi determined
that this rental rate was below market.
To estimate market rent (and to make his determination that
the rental rate in the Jacobs lease was below market), Carneghi
used 8 lease comparables, 5 for ground level spaces and 3 for
upper level spaces. Carneghi determined that the range of rents
for the upper floor office spaces was $1.07 to $1.30 per square
foot on a full service basis,31 and that the range for the ground
floor commercial spaces was $1.03 to $1.30 per square foot on a
triple net basis after adjustment for expenses. He further
determined that a survey of the relevant area indicated that the
lowest rent for office space in Redwood City on the valuation
date was $1.15 per square foot, fully serviced.
After considering the location, quality, age, and lack of
parking at the Redwood City Fox, Carneghi estimated market rent
of $1.10 per square foot, full service, for the Second floor
31 According to Carneghi, office leases are typically on a
“gross” basis, whereby operating expenses are borne by the
tenant. Office leases can also be on a “full service” basis,
whereby operating expenses are borne by the landlord. With
respect to retail space, in a “triple net” lease, operating
expenses are borne by the tenant, and in a "gross" lease,
operating expenses are borne by the landlord.
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