An established architecture firm based in Orlando, Florida, needed to relocate from a main location they’d held for 75 years. The firm had held two separate locations over the years, making their growth choppy and inefficient.
Since the locations were approximately a half mile apart, there was no cohesive approach to their business. This created significant excess space and overlap, such as multiple reception areas, kitchens, and conference rooms.
The architecture firm decided it was time to “right-size” and have all 150 or so employees working together in one building, on one floor. To do that, they needed an expert in relocation: Cresa.
After interviewing three real estate brokers, the client chose to work with Cresa because of its tenant-only model. They knew they needed a detailed, hands-on representative who was seasoned in start-to-finish negotiation for this relocation. As complications arose during this project, they would be proven right.
Several challenges presented themselves to the client during this negotiation:
- The client was paying rent at the top of the market with no controls in place to protect their economic interests.
- Their main building was owned by a prior company founder; this made negotiating uncomfortable for the client, who didn’t want to offend their founder.
- The above, combined with their lopsided occupancy cost, made for unnecessarily high expenses.
Cresa mapped out a detailed space program with the client to determine what they needed and wanted from their space and the square footage associated with that. This allowed Cresa to go to market with a more fine-tuned idea of what the client needed.
Cresa assessed multiple submarkets that were either near thoroughfares, employee housing, or both. After gathering these options, Cresa then assessed the viability of each with the client, shortlisted further, then set the tour time.
One property toured fit almost all of the listed criteria. All was going well, until in the midst of negotiations, the desired building went back to the bank. It was up to Cresa to salvage the building and the deal. Once the new asset manager was on board, Cresa prepared and negotiated a thorough and detailed letter of intent (LOI), then further reviewed the lease language in detail.
Cresa, knowing the devil is in the details, made sure that all the points of the LOI were incorporated into the lease. Cresa also ensured that the language offered their client the flexible protections needed for an ever-changing business environment.
Shortly after lease execution, the market downturn occurred—right when the client needed to dispose of excess space. Cresa secured a subtenant to take up all the space that the client sought to downsize, and even better, they took it at a higher rate than the client was paying.
From the start of negotiating to lease signing, the process took approximately twelve months. This resulted in:
The client saw an immediate reduction of approximately $7 per square foot as a result of negotiations.
While their overall space grew to accommodate company growth, Cresa eliminated the client’s duplicate space, correcting their long-lopsided occupancy costs.
The client was able to get all their employees onto one floor, allowing their talent to easily interact and benefit from onsite collaboration.
After the lease’s execution, Cresa secured a subtenant for the downsized space willing to pay a higher rate than their client.
Cresa ensured that the language of the lease offered their client flexible protections.