john updike, director of real estate. good morning. so negotiations for this began unbelievable back in 2015. here we are, finally, with the deal, and we're really pleased to have this transaction before the board. this is a ten year lease. takes us through 2028 plus two five year options for renew als. those would be for the greater of 95% of market rent, and we estimate a commencement date of may 1, so that's when rent would commence. we think the punch list for minor tenant improvement work will be done by then. the price on this is $468,000 a year. that's about $765 perunit. it increases annually at a percentage of cpi, 60% of cpi bracketed, not less than 2%, not more than 6% annually. there is about 2100 square feet of ground floor commercial space, operation support space and basement space that's included in the rent. as the budget and legislative analyst's report will note, we did have an appraisal on this, and it does indicate we are substantially under the rate as established in the appraisal. technically, an appraisal is not

john updike from the department of real estate. >> good morning again. john updike, director of real estate. this is the item you were all waiting for. it was a very inspirational moment. happy to be here. this was a new lease for 520 sacramento between kearny and grant. it's 9250 square feet on two floors of a three floor building. it houses our chinatown child development center. i do have representatives of the department of public health here to talk about the program if you have questions about that program. we've been in this location originally since 1996. current lease expires june 30th of this year. this new lease would be consistent with $51 persquare feet. that is consistent with the appraised value. ownership felt that was a compromised item. they felt the value was higher. we also did pursue for a short while the purchase of this property. that did not come to pass. we could not come to terms with the owner over a purchase. the department is considering moving this location, joining it with other activities located at 1490 mason street, and