Issue:
AECOM wanted to renew an 85,000 SQFT lease. Because there were no other blocks of space that large in the submarket, the Landlord proposed a rate $2/SQFT higher than they were asking for smaller spaces within the building, with no other significant concessions. By the time we got involved, they’d been in a stalemate for 6 months with no movement from the LL.
Solution:
Avocat Group found a land parcel for sale that could accommodate a 100,000 SQFT building, placed it under contract with a 60 day right to cancel, hired an architect to do a simple site plan, and then had 4 contractors bid for a build-to-suit. One of the contractor’s was their Landlord’s who mentioned that AECOM was moving.
Result:
The landlord dropped the rate by more than $4/SQFT and provided a number of concessions totalling $3.1M savings over the original offer including a generous renovation allowance and free storage area in the parking garage. AECOM renewed their lease, terminated the purchase contract, and got a full refund of their purchase deposit.
