ECR negotiates office disposition and enables Industrial Tax Consulting to right-size early saving 39% off current and future lease costs.
Client’s Goal
Immediately reduce office footprint by 35%.
Capture current market rates vs future risk of a 14% rate increase over the next 2 years
Eliminate potential long-term exposure of being obligated to pay on two leases
Challenge
ITC had less than two years on their lease and consulted with ECR about strategies to immediately reduce their Austin real estate costs and risk.
Subleasing was an obvious choice but needed to be completed within 120 days and also carried potential long-term exposure of two lease obligations
Staying at current location cost more in short term, plus ITC would pay higher future rent costs due to 7.5% yearly office market rate increases.
Strategy
ECR knew that by deploying aggressive marketing efforts, they could find a tenant to sublease the ITC space and if positioned appropriately, could source a tenant that would allow ITC to terminate the lease.
In conjunction with locating a replacement tenant, ECR would have to quickly find and negotiate an alternate office option in 60 – 90 days, while keeping a potential assignment of their existing lease obligation in play.
We are small company with offices in Austin and Houston. Part of the firm was relocating to the Houston office and I saw this as an opportunity to downsize and save on rent. ECR was quick to point out how we could take advantage of the current market and laid out perfectly the financial benefit of moving our office. ECR came prepared and quickly distinguished themselves as the best choice in the industry.
Gerry Amoroso
Industrial Tax Consulting
ECR’s ability to listen to our situation and quickly understand our needs was the driving factor in our relocation. ECR identified an off-market opportunity that allowed us to terminate our lease, right-size our office and move to a new location!! They prepared a thorough financial breakdown of our situation and the opportunities and risks of taking advantage of the current market or waiting till our lease expired in another two years. They also assisted in reviewing our contract and saving us money on legal counsel. David and his team were always quick to respond to any and to all our needs.
Gerry Amoroso
Industrial Tax Consulting
Results
Leveraging relationships with brokers in the market, ECR quickly found an off market, strong credit tenant before the ITC sublease was ever put on market
Landlord agreed to terminate lease with a minimal fee charged to ITC.
ECR quickly located and successfully negotiated a lease rate at a new building that was a 17.5% savings below alternate options in the same submarket.
The total savings ECR enabled Industrial Tax Consulting achieve was over $98,000, which equated to a reduction in potential real estate costs of 39%.
