ECR consolidated SF and locked in a reduced rate for Orion through an extend and blend strategy while still maintaining flexibility and growth options.
Client’s Goal
Reduce near term lease costs and conserve cash during The Great Recession.
Sublease or terminate lease on under utilized space.
Consolidate operations to single floor.
Challenge
Market rates had decreased, and Tenant was paying above market rates.
Twenty-four months left on the lease.
31% of space was not being used and office space was on separate floors.
Wanted flexibility for future growth as the economy rebounded.
Strategy
Market space for sublease to create leverage in negotiations.
Approach landlord with extend and blend option for long-term tenancy at building.
Negotiate expansion options to accommodate future growth and long-term tenancy.
Lock-in lower rates to hedge against future rental rate increases.
Results
Negotiated extend and blend immediately reducing lease costs and conserving cash.
Consolidated to a single floor and reduced square feet leased.
Negotiated ROFO options on contiguous space that coincided with timing of future growth.
Effectively arranged a termination option providing increased flexibility.
