Navigate Up
Sign In
Click to show/hide contact information.

UCSC Real Estate Leases & Licenses

Expand or contract all step headings
printer
printer
increase font size Decrease Font Size
 
 
 
 magnifying glassDelete Circle
  • Lease, UC as Landlord

    Are you a UCSC unit considering leasing space to non-UC parties, or a non-UC party wishing to lease space from UCSC?

    The UCSC campus owns properties that may be leased to third-parties. These properties are currently primarily located at the UC MBEST Center, located in Marina, CA. When such space is to be made available to a third party, a lease or license must be executed. (Licenses are used instead of leases in specific circumstances, described here. Real Estate and Contract Services (RECS) helps units lease out space by obtaining campus approvals, negotiating lease terms, preparing final documents, executing, and retaining records.

    Leases of UC facilities to third parties follow this sequence:

    • The campus unit that wants to lease space fills out a project summary/concurrence form, and after obtaining approval from the Principal Officer of the unit's Division, emails it to realestate@ucsc.edu.
    • RECS will circulate the project summary to obtain concurrence and approval by the Campus Provost/Executive Vice Chancellor, and report the approval to the UCSC Advisory Committee on Campus Planning and Sustainability ("ACCPS"). If the project cannot be approved by concurrence, the campus unit that wants to lease space will need to make a presentation at the following ACCPS meeting to obtain ACCPS' recommendation that the CP/EVC approve the lease of campus space.
    • RECS will negotiate lease terms in coordination with the requesting campus unit.
    • RECS will prepare a lease based on the UC Standard Form Lease on the terms approved by the CP/EVC.
    • Prior to lease approval, RECS will ensure that all appropriate campus units are involved. Such units may include Risk Services, Fire Marshall, Physical Planning and Construction, Environmental Health and Safety, and the Environmental Assessment Group.
    • RECS completes additional University documentation and ensures that appropriate environmental evaluations have been prepared.
    • The tenant prospect signs two originals of the lease. The lease is generally executed by the Real Estate & Contract Services or Vice Chancellor, Business and Administrative Services, depending on delegated authority.
    • RECS retains records of the lease and assists units with managing the lease and interpreting lease terms
    • Tenants typically pay the University an initial security deposit and a monthly rent based on the size of leased premises. For campus spaces, the lease is usually a "gross lease", which includes utilities and services within the leased space, as well as common area maintenance costs. Although the University does not pay property taxes, the local taxing authority may separately charge private tenants a possessory interest tax on the imputed value of the lease. RECS is available to interpret any such charges.
      • If the space being leased is state-funded space, the campus unit leasing the space will need to enter into a memorandum of understanding with Physical Plant to repay the campus for the operating costs of the space: utilities, janitorial, grounds, refuse, etc. RECS will assist in facilitating this discussion with Physical Plant.
    ​​​
    Back to Top
  • Lease, UC as Tenant

    Are you considering leasing space off campus?

    Real Estate & Contract Services will help you coordinate with other campus units that will help you obtain campus approval, select a site, manage tenant improvements, and organize your move-in. This webpage summarized the process, but your unit will need to be familiar with all the steps.

    HOW TO GET STARTED

    Even before you actively start looking for lease space, there are some questions to answer and steps to take:

    1. In accordance with the campus Space Management Principles, all space requests, including requests for possible leased space, must be processed through the unit/division's Space Control Officer (Dean, Vice Chancellor, Vice Provost, or the University Librarian) or their designee.
    2. The Space Control Officer or designee should first attempt to satisfy the space request within the unit/division's existing space. If there is insufficient space within the unit/division, a formal space request should be submitted to Capital Planning and Space Management (CPSM).
    3. If CPSM cannot identify appropriate space to meet the needs identified in the space request, CPSM may make a recommendation to lease off-campus space.
    4. After receiving a recommendation to lease off-campus space, the Space Control Officer may begin the lease process by starting to fill out the "Lease Proposal Form" and emailing it to realestate@ucsc.edu.
    5. What level of project management support will your project require? RECS will send your lease proposal to Physical Planning and Construction (PP&C) and ask them to assign a project manager to work with you to scope your lease project's requirements.
    6. What kind of funding will you need to budget for this leasing project? PP&C is a recharge unit, and so you will need to set up a "construction funding request" (CFR) for the project.

    RECS will set up your lease coordinating committee, which will work with you all the way through your leasing process through move-in. Your unit, as the client, will need to designate a unit representative to serve as the single point of contact for your unit.

    CAMPUS APPROVAL PROCESS

    All leases will require documentation of the Campus Provost/Executive Vice Chancellor's (CP/EVC) approval for entering into a lease. The lease coordinating committee will work with your unit to provide sufficient information for campus approval.

    Forms you will need:

    • For most leases, the CP/EVC is approving a "Lease Proposal," which delineates the size and cost parameters within which a lease will be negotiated, providing flexibility in selecting a site and in lease negotiations.
    • In some cases (e.g., extensions of existing leases), a "Project Summary" will be required for approval, and will reflect all the negotiated terms of the agreement for the specified site.
    • Requests for approval, in the form of a Lease Proposal or a Project Summary are submitted by your unit's Principal Officer (Vice Chancellor, Vice Provost or Dean) to RECS.

    SITE SELECTION

    If you haven't selected a site, RECS will conduct a search for space that meets your requirements. Typically, RECS issues a request for proposals (RFP) to the local real estate brokerage community, listing the space requirements and other specific needs as established in your Lease Proposal Form or as further developed by the lease coordinating committee.

    RECS will produce a spreadsheet describing the spaces for lease, their specifications, associated costs, and strengths and weaknesses. This will be used by the lease coordinating committee to assist you in selecting a site.

    DUE DILIGENCE

    The coordinating committee will conduct due diligence at the selected site and confirm that it meets UC policy requirements and conforms to other applicable laws and regulations. Preliminary due diligence often helps inform the site selection process as well. The coordinating committee will perform the following due diligence:

    • Seismic and structural review
    • California Environmental Quality Act (CEQA) compliance
    • Building condition review
    • Conformance with UC Policy on Sustainable Practices
    • Environmental Phase I Assessment/other environmental review
    • Code compliance review
    • Americans with Disabilities Act review
    • Occupancy permit verification

    TENANT IMPROVEMENTS

    Different lease projects will require different levels of tenant improvements (TIs). In general, if any improvements are required beyond the configuration of cubicle furnishings, these are included in the lease negotiations for the landlord to construct required TIs.

    TIs are constructed after the lease is executed. TIs may be funded and constructed in various ways, and a single TI project may include one or more forms of construction and payment. The three predominant forms of TIs are:

    • Turn-Key TIs: Landlord funds and constructs TIs to UC specification, and the rent rate reflects the value of improved space
    • Amortized TIs: Landlord constructs TIs to UC specification, with the total project cost amortized over the life of the lease (or other specified period) at the landlord's cost of financing, to be paid by UC on a $/RSF/month basis in addition to base rent
    • UC-Constructed TIs: UC contracts for the construction of TIs at UC expense, requiring Unit to have sufficient funds available before project is bid.

    What is required:

    • Detailed space program developed by CPSM in conjunction with unit representative
    • Summary of the scope of work to be performed and justification for the improvements
    • A list of sustainable measures considered
    • IT configuration plan
    • List of special unit requirements

    Tenant improvement costs are limited to the level approved by the CP/EVC in the lease proposal.

    LEASE DOCUMENT REVIEW

    Once your proposed lease action has received campus approval, you've selected a site, the lease coordinating committee has successfully completed the required due diligence, and RECS representative has completed negotiation of lease terms and a draft lease form with the landlord, the coordinating committee will initiate further review of the draft lease form as appropriate. The authority that the UC Regents delegate to UCSC to execute lease agreements requires that (1) Risk Services approves indemnification and insurance terms for all leases; and (2) University counsel review agreements prior to execution under certain circumstances.

    EXECUTION

    Once a final lease has been reviewed and the lease/license execution checklist is complete, the RECS representative will coordinate the lease execution process.The representative will coordinate with the prospective landlord to arrange for landlord's execution, and upon the prospective landlord's return of an appropriate number of executed original documents, RECS representative will coordinate execution by the UCSC Chancellor, Vice Chancellor - Business & Administrative Services, or Real Estate & Contract Services Director as appropriate. Once the lease agreement has been executed, and the UCSC Campus Fire Marshal or other authority has granted an occupancy permit for the leased space, your unit may begin moving into the space. Regardless of the occupancy date, the University's obligations under the lease agreement commence upon lease execution.

    MOVE PLANNING AND IMPLEMENTATION

    The coordinating committee will assist your unit with move planning, which will occur simultaneously with lease negotiations and due diligence activities. For large or complex moves, a unit may be advised to contract with a move coordination consultant. Similar to tenant improvements, move planning costs are limited to those approved by the CP/EVC.

    BUDGET OVERSIGHT

    The Capital Planning and Space Management (CPSM) representative will oversee the overall project budget throughout the lease, tenant improvement, and move processes, and will raise cost containment issues for the coordinating committee's consideration. If costs cannot be kept within approved limits, the CPSM representative will coordinate with the unit to meet with the VC Planning and Budget to initiate CP/EVC approval of revised cost estimates.

    TRANSMITTAL TO UNITS

    Within one week of the execution of the lease agreement, RECS will prepare a 'Summary of Lease Obligations' and an annual cash flow projection over the life of the lease for your principal officer, clearly delineating the financial and other obligations your unit has assumed by entering into lease. RECS will also provide a draft 'Concurrence Letter' affirming that the Principal Officer understands and accepts the obligations outlined in the Summary of Lease Obligations, which your principal officer will send to the CP/EVC as soon as is feasible after execution.

    Your unit can refer to the Summary of Lease Obligations document as necessary throughout the lease term to review its responsibilities and to determine how to respond to any issues that arise. RECS will continue to be available to answer any of your questions regarding the lease, of course.​

    ​​​
    Back to Top
  • Lease Support

    FACILITY MANAGEMENT SUPPORT FOR OFF-CAMPUS FACILITIES

    The UCSC Real Estate & Contract Services Department provides facility management services for the following properties:

    Scotts Valley Center & MBEST Center

    If you need to contact these centers, please email recs@ucsc.edu for assistance.

    FINANCIAL SUPPORT FOR OFF CAMPUS LEASES

    RECS is here to assist you in clarifying financial information related to your lease: rent, monthly maintenance (NNN) and tenant improvement (TI) charges. RECS can also help guide you in setting up your lease payments in CruzBuy and with FAST.

    The process for setting up and modifying lease POs is detailed in the Lease PO Procedures document, including how to set up a "roll over line" to make sure your PO stays active throughout the term of your lease. We can assist you in scheduling the annual NNN and rent increases that you will need to make annual change orders for your lease PO well ahead of when the new payments are due.

    To ensure payments even when landlords do not send regular invoices, FAST encourages units to submit "Direct Payment" forms each month, prior to the lease payment due date. RECS can help you create a master copy of the direct payment form required to generate a payment for the monthly Rent, NNN & TIs.

    If you need assistance with resolving a financial issue with your landlord, please email realestate@ucsc.edu. We will work with you to analyze the financial question, and will help you to coordinate with RECS lease administration staff to help you manage your communication with the landlord.

    IMPORTANT NOTE: NEVER CANCEL A LEASE PURCHASE ORDER WHILE THE LEASE IS STILL IN EFFECT. The purchase order (PO) should be a "Blanket," and periodic changes made via change orders to the blanket PO. This is the only way that Plant Accounting can track the lease over its life for the purposes of the campus' financial statements.

    LEASE ADMINISTRATION SUPPORT FOR OFF-CAMPUS LEASES

    Units should be familiar with the terms of their off-campus leases, but RECS is here to help you with your interactions with your landlord regarding the terms of your lease. The RECS can help you with any questions you may have regarding interpreting your lease, please email realestate@ucsc.edu.​​​​​

    ​​
    Back to Top
  • License Procedure, UC as Licensee

    Are you considering sharing space with a non-University group in a building or on a property not owned by the University?

    The process for entering into a space license as licensee is similar in many ways to the process for entering into a lease agreement as tenant. As with the lease process, your unit will need to obtain campus approval to enter into a space license, and the appropriate campus units will need to perform due diligence for your selected site to ensure its suitability for license. RECS will help you coordinate the campus approval process, due diligence, and other necessary tasks prior to execution of a space license agreement.

    Space licenses typically feature shorter terms than leases, and also significantly lower consideration (if any). Because the obligations to the University associated with entering into a license are lower than with leases, the process for entering into a space license agreement is also scaled down (in most cases) from the lease process as well. RECS will help guide you through the license process as needed and answer any questions you may have about what do next.

    HOW TO GET STARTED

    As with the lease process, you will need to prepare a "Project Summary Form" describing the space to be licensed, the nature of your unit's intended use, the potential financial obligations to the University, etc. When the form is complete, email realestate@ucsc.edu to arrange for campus review and approval. Depending on the nature of your proposed space license, RECS may set up a license coordinating committee, similar to lease coordinating committee. However, as space licenses with UC as the licensee rarely involve major tenant improvement projects, moving lots of staff to a new location, etc., in most cases a coordinating committee will not be necessary. RECS will in any event coordinate with the relevant campus units to perform due diligence or other necessary tasks as needed, prior to execution of the space license.

    CAMPUS APPROVAL PROCESS

    As stated above, all space licenses must be approved by the Campus Provost/Executive Vice Chancellor (CP/EVC) prior to execution. RECS will assist your unit in securing this approval. Your unit's Principal Officer will need to approve the Project Summary Form describing the proposed license, among other campus stakeholders and administration.

    SITE SELECTION

    If your unit is looking to enter into a space license agreement, RES assumes you already have a site in mind, and specific reasons for considering sharing space at that location. If your unit but does not have a particular site in mind or a reason to share space with a non-University entity, it will be logistically much easier to enter into a standard lease agreement instead. Please email realestate@ucsc.edu with any questions about how to best accommodate your space needs.

    DUE DILIGENCE

    Real Estate & Contract Services will coordinate the completion of due diligence for your selected site, which for the most part will be similar to the due diligence required for leases with UC as tenant. Due diligence will include seismic and structural review, review for California Environmental Quality Act (CEQA) and Americans with Disabilities Act (ADA) compliance, environmental conditions review, and review for fire/life safety code compliance.

    SPACE IMPROVEMENTS

    As space licenses are most often short in duration and for relatively small amounts of space, it is not usually in the University's interest to contribute to the cost of improvements to a licensed space, or to enter into a space license that will require improvements to the space due to the University's use. Please email realestate@ucsc.edu to discuss the potential need for improvements to space you are considering licensing.

    LICENSE DOCUMENT PREPARATION AND REVIEW

    Once your proposed license action has received campus approval and due diligence has been completed, RECS will negotiate with the other party to draft a suitable license agreemement form. Presently, all space license agreement forms require review by the UC Office of General Counsel (OGC) prior to execution. This process can take up to 4-6 weeks; please be sure to consider counsel review time when planning your schedule to access and use the space. License agreement forms also require review by the UCSC Office of Risk Services. RECS will coordinate all required review.

    EXECUTION

    RECS will coordinate the license execution process once campus approval to proceed has been secured, due diligence is complete, and an appropriate form has been negotiated and approved for execution. Once the space license has been executed, your unit may begin using the space.

    TRANSMITTAL TO UNITS

    Upon execution of a license agreement, RECS will prepare a 'Summary of License Obligations' letter for your Principal Officer, clearly delineating the financial and other obligations your unit has assumed by entering into the license. RECS will also provide a draft 'Concurrence Letter' affirming that the Principal Officer understands and accepts the obligations outlined in the Summary of License Obligations, which your principal officer will send to the CP/EVC as soon as is feasible after execution.

    Your unit can refer to the Summary of License Obligations document as necessary throughout the license term to review its responsibilities and to determine how to respond to any issues that arise. The RECS department will continue to be available to answer any of your questions via email at recs@ucsc.edu.​​​

    ​​​​
    Back to Top
  • License Procedure, UC as Licensor

    Are you considering sharing in a University building or on University property with a non-University group?

    The process for entering into a space license as licensor is similar in many ways to the process for entering into a lease agreement as landlord. As with the lease process, your unit will need to obtain campus approval to enter into a space license, and the appropriate campus units may need to perform due diligence on the proposed use of the University property or building by the prospective licensee. RECS will help you coordinate the campus approval process, due diligence, and other necessary tasks prior to execution of a space license agreement.

    HOW TO GET STARTED

    As with the lease process, you will need to prepare a "Project Summary Form" describing the space to be licensed, the nature of the prospective licensee's intended use, revenue the University can expect to realize from the license, any financial obligations the University to make the space available to the licensee, etc. When the form is complete, send it to realestate@ucsc.edu to arrange for campus review and approval.

    CAMPUS APPROVAL PROCESS

    As stated above, all space licenses must be approved by the Campus Provost/Executive Vice Chancellor (CP/EVC) prior to execution. RECS will assist your unit in securing this approval in the fashion described in the UC as landlord lease procedure. Your unit's Principal Officer will need to approve the Project Summary Form describing the proposed license, among other campus stakeholders and administration.

    One component of the proposed license is the "consideration", or base license fee that will be charged. The campus generally charges a fee that is based on market rates, which may require an appraisal. Contact realestate@ucsc.edu for more information about how RECS will work with your unit to set a license rate. Note that allocation of license revenues is at the discretion of the CP/EVC.

    Another component of approval is reaching an agreement with Physical Plant regarding payment for maintaining the space. If the space is currently state funded ("OMP") space, then it is included in Physical Plant's list of buildings to maintain. The unit will need to collect maintenance and utilities costs from the licensee and enter into a memorandum of understanding (MOU) stating that the unit will provide these revenues to Physical Plant to reimburse the campus for the cost of upkeep. RECS can help your unit estimate the charges to the licensee and will provide an example MOU. Contact recs@ucsc.edu for more information.

    DUE DILIGENCE

    RECS will coordinate the completion of due diligence on the prospective licensee's proposed use. Due diligence may include an inspection of the prospective licensee's financial records, review by the UCSC Physical Planning & Construction (PP&C) office of the feasibility of any improvements or technical installations the licensee is proposing, review by the Environmental Health & Science (EH&S) office for potential environmental impacts, and review by the UCSC Environmental Assessment Group (EAG) for compliance with the California Environmental Quality Act (CEQA).

    SPACE IMPROVEMENTS

    Any potential improvements or alterations to University buildings or property should be described in the Project Summary Form and must be approved by the Campus Provost/EVC, and by PP&C once the Project Summary Form has been approved. The space licensee should expect to pay for all costs associated with PP&C's review process, even if the improvements or alterations are ultimately not approved. RECS will coordinate the PP&C review process as necessary. Generally, the EVC and campus administration will be skeptical of significant alterations to the campus buildings or property that do not clearly benefit the University's planned use of that space. Please email realestate@ucsc.edu to discuss any improvements requested by prospective licensees if you have any questions.

    LICENSE DOCUMENT PREPARATION AND REVIEW

    Once your proposed license action has received campus approval and due diligence on the proposed use has been completed, RECS will negotiate with the other party to draft a suitable license agreement form. The license will be based on the UC Standard Form License, and the insurance provisions will be obtained from the UC Risk Service Manager. Presently, all space license agreement forms require review by the UC Office of General Counsel (OGC) prior to execution. This process can take up to 4-6 weeks; please be sure to consider counsel review time when planning your schedule to access and use the space. License agreement forms also require review by the UCSC Office of Risk Services. RECS will coordinate all required review.

    EXECUTION

    RECS will coordinate the license execution process once campus approval to proceed has been secured, due diligence is complete, and an appropriate form has been negotiated and approved for execution. Once the space license has been executed, the licensee may begin using the space, unless otherwise provided for under the license.

    TRANSMITTAL TO UNITS

    Upon execution of a license agreement, RECS will provide a copy of the license to both the licensing unit and the licensee. RECS will continue to be available to answer any of your questions regarding the license.​​​

    ​​
    Back to Top
There are no results.
University of California
UC Santa Cruz, 1156 High Street, Santa Cruz, Ca 95064
©2021 Regents of the University of California. All Rights Reserved.
Site Feedback
finaff-tech@ucsc.edu