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Real Estate: Leasing

Real Estate leases real estate for the University, as both a tenant and a landlord.

UC San Diego as Landlord

Transactions that involve use of University property by an external entity require a lease agreement with the University of California Regents. Real Estate is responsible for:

  • Leasing space in University-owned buildings and land (ground lease) to external entities
  • Negotiating and administering ground leases for University property, (A ground lease is used when the landlord owns the land but not the structures on it. Science Research Park is an example of ground leased property.)

Departments should direct all leasing inquiries to Real Estate.

UC San Diego as Tenant

Transactions that involve the use of non-university property by a UC San Diego or Medical Center entity require a lease agreement between the external property owner and the UC Regents. The Chancellor has delegated Real Estate as the office responsible for all off-campus leased space.

Real Estate works closely with departments to guide them through the leasing process. The process typically takes several months.

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1. Initiating an Off-Campus Space Request

Departments interested in leasing space off-campus must complete the Off-Campus Space Request Form (OCSR) and Space Planning Guide (PDF). Submitting a properly signed Off-Campus Space Request confirms the department's financial commitment and authorizes Real Estate to begin lease negotiations.

Real Estate will meet with a department representative to discuss the off-campus leasing process and the department’s space needs, including:

  • Square footage (size of space needed)
  • Use of space (offices, medical, clinical, lab, etc.)
  • Term of lease (how many years)
  • Number of employees
  • Location preferences (La Jolla, UTC, Hillcrest, Mission Valley, etc.)
  • Timeframe (When does the department need the space)
  • Budget available
  • Parking (number of spaces needed)

2. Site Search

Real Estate presents potential sites to the department and arranges site visits. Once the department selects one or more suitable sites, Real Estate proceeds with lease negotiations and UC-required inspections (described below).

Real Estate completes a market survey and financial analysis to determine the rates for comparable buildings. This may involve engaging a real estate broker approved by the campus.

3. Inspection

The University of California requires certain inspections (e.g., seismic, and Environment, Health & Safety, etc.) before a UC San Diego department can occupy a space. Buildings must also meet federal Americans with Disability Act requirements.

A building that must comply with OSHPD-3 requirements for licensed clinics will require additional inspections.

4. Lease Negotiations

Real Estate sends a request for proposal (RFP) to the landlord of each building a department selects. After all proposals are received, Real Estate prepares a comparative lease and financial analysis that includes lease specifics, such as:

  • Lease term
  • Rental rate
  • Annual rent increases
  • Operating expenses/utilities/janitorial
  • Parking costs
  • Tenant improvement allowance
  • Option to renew

Real Estate usually submits a counterproposal to the landlord(s). Typically, there are two or three rounds of lease negotiations. If multiple buildings are being considered, the department representative will select the appropriate building and proceed with a lease agreement.

5. Lease Preparation

After both landlord and tenant agree to all terms, Real Estate prepares a draft lease using the standard UC lease agreement. If the landlord requires use of its own lease document, a different process applies. The type of lease agreement used will determine the timeline for completing the transaction. 

Once both landlord and tenant have approved the lease, Real Estate obtains an environmental impact classification document from Campus Planning and submits a Data and Approval Form, which outlines lease details for final departmental approval.

After Real Estate, and the landlord execute the lease, Real Estate provides the department with a copy, and retains the original fully executed lease on file. Real Estate tracks lease agreement terms and conditions in its database.

6. Tenant Improvements, Renocations and Alterations

Real Estate oversees tenant improvements, and negotiates and coordinates all proposed changes to the leased properties, regardless of fund source. Renovations, repairs, and alterations are subject to landlord approval and must comply with applicable building and safety code requirements.

Real Estate monitors compliance with lease terms and assists departments by:

  • Space Planning
  • Reviewing construction bids
  • Overseeing the construction process
  • Obtaining city building permits
  • Coordinating required building inspections
  • Resolving liability issues

Departments must complete the Renovations and Alterations Form (R&A) (PDF) before any work can be performed in leased or managed properties.

7. Lease Renewal

Departments should monitor lease expiration deadlines and renewal options. When a lease is due to expire, Real Estate will notify the department and ask if it intends to renew or terminate the lease.

If a department chooses to renew, Real Estate will begin negotiations with the landlord. The department will have final approval of lease renewal terms. Real Estate will prepare the necessary lease amendment to extend the term of a lease.

If a department decides not to renew the lease. Real Estate will notify the landlord and work with the department to vacate the space when the lease expires.

Administrative Responsibilities

Real Estate also oversees the following:

  • Insurance — Real Estate coordinates obtaining the necessary certificate(s) of insurance from the external entity and UC San Diego’s Risk Management department.
  • Property tax and possessory interest — Real Estate files property tax exemptions on behalf of the departments leasing space off-campus and provides possessory interest information to the taxing authorities.
  • Annual rent escalation and operating expense audits — Real Estate monitors these for all off-campus lease agreements.

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