Case Studies
Leveraging Market Conditions to Improve the Bottom Line: McKinney Case Study
The Goal
To assist McKinney in leveraging favorable commercial real estate conditions and decreasing overhead costs during a difficult economic period.
The Means
McKinney, an award-winning advertising agency based in Durham, engaged Rich Commercial Realty with the challenge of reducing overhead expenses during the unpredictable business conditions of 2009. Happy with their unique space in the historic American Tobacco Campus, McKinney wanted to stay put, however, they wanted to leverage the market conditions to take advantage of current concessions being offered. The solution needed to be a win-win for McKinney and the landlord.
The Solution
Michelle Rich Goode approached the landlord with a solution that extended the length of the lease and provided for a lower per-square-foot rate for McKinney over the term. Securitizing other financial terms was a factor to the landlord, which Michelle was also able to build into negotiations.
The Result
Michelle negotiated a counter-offer that yielded a “blended and extended” lease that allowed McKinney to reduce their rental expenses during a tough economic period yet ensured that the landlord still received additional term to offset the concessions offered.
Additionally, negotiations between the landlord and McKinney caused the lease guarantee to be replaced with a security deposit at the end of the initial lease term. A Tenant Improvement Allowance was another economic incentive obtained for McKinney’s future needs.
“Over the years Michelle has served McKinney well, both for her strategic partnership and keen knowledge of market conditions,” said Joni Madison, partner and COO of McKinney. “Her strong relationship with American Tobacco and masterful negotiation skills helped us make a tactical business decision that helped our bottom line immediately and secured our home at American Tobacco for years to come.”
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