Title
[Contract] Fourth Amendment to Office Lease Agreement with Skyslope, Inc.
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FileID
File ID: 2026-01537
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Location
Location: 827 K Street, District 4
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Recommendation
Recommendation: Pass a Motion authorizing the City Manager or designee to execute the Fourth Amendment to the Office Lease Agreement with Skyslope, Inc. for the City-owned property located at 827 K Street, extending the lease term through December 31, 2027, with one one-year renewal option through December 31, 2028.
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Contact
Contact: Steve Ward, Real Property Agent, (916) 808-1081, stward@cityofsacramento.org; Richard Sanders, Facilities and Real Property Superintendent, (916) 808-7034, rsanders@cityofsacramento.org; James Christensen, Facilities Manager, (916) 808-5863, jechristensen@cityofsacramento.org; Department of Public Works
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-Fourth Amendment of Office Lease Agreement
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Description/Analysis
IssueDetail
Issue Detail: The City-owned property located at 827 K Street (Property) is a three-story building containing approximately 73,098 gross square feet in downtown Sacramento. Skyslope, Inc. (Skyslope) currently leases approximately 19,425 square feet on the second floor of the Property. Its current lease term expires on December 31, 2026.
Skyslope has requested a one-year extension of the lease through December 31, 2027, with an option to renew for one additional year through December 31, 2028. Extending the existing lease will maintain occupancy and rental revenue at the Property while providing the City flexibility regarding the future use and leasing of the building.
Staff recommends approval of the Fourth Amendment to the Office Lease Agreement to extend the lease through December 31, 2027, with one one-year renewal option through December 31, 2028.
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PolicyConsiderations
Policy Considerations: The recommendation in this report is in accordance with City Code section 3.04.020, which requires City Council approval of real property agreements involving expenditures of $250,000 or more and City Code Section 3.68.120 concerning council approval of amendments to existing leases.
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EconomicImpacts
Economic Impacts: None.
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EnvironmentalConsiderations
Environmental Considerations:
California Environmental Quality Act (CEQA): It has been determined that the proposed activity of entering into an amendment to the lease agreement is not a project pursuant to the California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(2 and 4). The activity described in this report is continuing administrative or activity and government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The proposed activity is not subject to CEQA pursuant to CEQA Guidelines Section 15060(c)(3).
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Sustainability
Sustainability: Not applicable.
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Commission/Committee Action
Commission/Committee Action: Not applicable.
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RationaleforRecommendation
Rationale for Recommendation: Skyslope has occupied approximately 19,425 square feet on the second floor of 827 K Street since 2016. The City acquired the Property in December 2023 subject to the existing Skyslope lease, as previously amended.
Approval of the Fourth Amendment will maintain occupancy and rental revenue at the Property through December 31, 2027, while avoiding a near-term vacancy and the costs and uncertainty associated with marketing and re-leasing the space. The additional one-year renewal option provides the potential for continued rental revenue through December 31, 2028 while preserving flexibility for the City's future use and leasing of the Property.
For these reasons, staff recommends approval of the Fourth Amendment to the Office Lease Agreement.
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FinancialConsiderations
Financial Considerations: The monthly base rent for the extended term running from January 1, 2027, through December 31, 2027, is $26,806. The leasehold value of the extended term is $321,675 and will increase to $653,000. if Skyslope exercises its one-year renewal option. These rental proceeds will be collected by the contracted property management firm (Administrative Services Agreement # 2024-0876-1) and utilized to cover property management fees, on-going repairs & maintenance, building services, and taxes.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): Not applicable.
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