CREATIVE DEAL STRUCTURE, LIFE CYCLE SERVICES, SUBLEASE COST MITIGATION
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A leading investment firm had outgrown its offices several years prior to its lease expiration, and hired us to find an opportunity to expand in the building or relocate to a new site in Back Bay. The top choice – a LEED Platinum office tower – had secured a low-rise anchor tenant and planned to break ground, but the developer was hesitant to prelease the top floor – the best space in the building – to a single floor user.

To break the impasse, we proposed a flexible deal structure to the landlord: agree to terms with our client, but retain the right, prior to construction, to relocate the tenant, if [i] a multi-floor tenant agrees to pay a premium price for the top floor, [ii] the views on the relocated floor remain comparable; and [iii] the rent rate on the relocated floor is discounted. Both parties could now agree; the Landlord established a minimum price for the top floor and retained long term leasing flexibility, and our client obtained beautiful offices with spectacular light and views, ultimately at a discounted rent rate. The creative deal structure allowed both parties to get what they wanted, in a case where the landlord otherwise had very little incentive to move forward.

After organizing interviews with project mangers and architects to work on the company’s new space, we stayed involved to mitigate the burn under the remaining lease obligation. Since the lead times and length of term required for a 20,000 foot office user made a sublease unlikely, we split the space into two smaller pods and marketed both on a turn-key basis with competitively priced rates. We quickly found two tenants who – because of the plug and play nature of the suites – could move in almost immediately after our client moved out.