Private Equity Firm Office Lease Renewal

When this client initially engaged our team, they were paying 10% above the building rate and had a lease expiring in 12 months. The landlord had approached them about an early renewal and offered a couple of months of free rent. The client had used a tenant representative from a larger firm, but we felt the initial lease was poorly negotiated and not very tenant friendly. Up engagement we presented six available alternatives that would sign a lease that did not commence for a year. This created competition for tenancy and fear of loss for the current Landlord. We also leveraged our hyperlocal market knowledge to discover the landlord was facing a pending refinancing event. We leveraged the tenants position to secure long-term below market economics and a generous improvement and furniture allowance to update their space.

Objective Outcomes

• Tenant secured an early renewal, saving time and money
• Tenant obtained a year of completely free rent
• Once rent did commence (24 months from date of lease amendment), it would start at a base rent 11% lower than previous amendment
• Reduced Gross-Up of building operating expenses by 5%
• Negotiated the right for tenant to audit the building’s operating expenses accounts and statements
• Obtained a $20 per square foot allowance for tenant to use on improvements and furniture
• Secured free parking for the full term of the lease extension
• Holdover rent reduced by 25%