John, I want to re-confirm your approval to enter into a new lease. We need to give notice to Canterra by end of June on whether we are extending for an additional 3 years to June 2005 or terminating our lease June 2002. 

I'm currently negotiating on 3 different sites as well as discussing the extension with Oxford:

Canterra		3 year lease - no renewal rights - $26sq/ft at 20,000 sq. ft. No ability to expand contiguously. Currently, at capacity.

TCPL Tower		Conoco has 3 floors (26,27,28 at 25,000 sq.ft/floor). With Gulf takeover, they will consolidate into Gulf Square. Looking for 3 floor 				sub-lease tenant. Likely $25/sq.ft 10 year lease w/renewal rights. Good floor-plate (column-free rectangle). One floor would likely be 			adequate for the next few years. Would overlap canterra lease by likely 9 months.

Bankers Hall		Calpine has 2 floors (39,40 at 19,000 sq.ft/floor). With Encal takeover, they will consolidate into Canada Trust. Looking for 2 floor 				sub-lease tenant. Likely $25/sq.ft. 10 year lease w/renewal rights. One floor would be less than adequate - 2 floors would be more 				than we need for the next few years. Would overlap canterra lease by likely 9 months.

Phillips Warehouse	2 floor warehouse being converted to 3 floor office bldg. 10 year lease w/renewal rights on 35,000 sq.ft at $20sq/ft. Will build to suit and 			Enron would have building naming rights. Timing with expiry of Canterra lease is good (Occupy date would be 1st qtr, 2002). 

My preference is to target the Phillip's brothers warehouse.Timing, location, price, sq.footage, parking all look good. They are willing to deal with us exclusively and have aspirations of designing a state-of-the-art office building (this is consistent with their reputation) while Calpine/Conoco want to free-option us while they look for multi-floor tenants (much like what happened when we made an offer on TCPL tower previously and they used it to lever Hunt Oil into a mulit-floor lease).  

Let me know your thoughts on this as I need to move fairly quickly.

 
---------------------- Forwarded by Rob Milnthorp/CAL/ECT on 06/04/2001 10:27 AM ---------------------------


Rob Milnthorp
02/14/2001 09:06 AM
To:	John J Lavorato/Corp/Enron
cc:	 
Subject:	Enron Canada Office Space

John, first off, congrats on your promotion! 

You may recall that our Canterra lease expires June, 2002. When we consolidated our floor space on 35, we were able to incorporate an option to extend the 35th floor lease (at market rate approx $24 sq.ft) for an additional 3 years to June, 2005. Notice to extend has to be provided June of this year. 

The reason I'm bringing this to your attention is that I'm concerned that we will not be able to accomodate any growth for years 2002 - 2005 in our current space. We will be at 115 employees this summer (150 sq. ft./employee) and our max is 130 (135 sq.ft/employee) which should get us through June 2002.

Given this, I have explored a number of leasing opportunities outside of Canterra with the goal of finding a floor plate more conducive to a trading organization. You may recall that TransCanada was in the process of building a new office tower across from Esso Plaza. They are now in the process of sub-leasing a number of the floors. 

The tower was designed for their own trading organization and is the largest column-free floor plate in Canada (28,000 sq. ft.). It's state of the art technology includes a raised floor system for wiring (ie no coring). Coral Canada recently leased two floors in the tower for their Canadian trading operation. 

We are looking at the 31st floor at $24 sq. ft for a 10 year term with some overlap with our current lease for build-out. At 135 sq. ft/employee we would be able to staff 200 employees. However, given the rectangular/column-free floor plate, we probably could get down to 100 sq. ft/employee (270 employees). This should be sufficient for many years to come.

Please let me know whether we should proceed in negotiating a lease with TCPL.

Regards
Milnthorp