Case Studies
Renewal vs. Relocation: SpecComm International, Inc. Case Study
Overview
SpecComm International, Inc., a 30-year-old publishing company of business magazines was feeling the pinch of the tough economy and business environment. Nearing the end of a five year lease for office space, they felt the need to compare renewal versus relocation costs. Their landlord had been understanding and had worked with them during the recession. With their landlord’s cooperation, SpecComm had down-sized their office space and returned space to their landlord to cut expenses; the landlord had even let them reduce their rent towards the end of the lease to help them through. But SpecComm management knew they had to cut expenses even more to improve profits over the next seven years and decided they needed to compare the proposed new lease from their landlord with the costs of other available properties.
Results
Rich Commercial Realty identified a number of interesting properties in their target area and reviewed them carefully with SpecComm management. There were two desirable properties available within one office park that gave SpecComm the economic leverage that it required for the next six years. Several rounds of competitive offers created a truly cost effective solution that more than met their expectations at a cost their current landlord felt he could not match. The new, larger space was designed and built to their specifications at the new landlord’s sole cost and expense. The new facilities provided more space, a more productive and enjoyable work environment while providing much needed economic relief.
Value Added
Rich Commercial Realty/KW Commercial negotiated rent concessions that were 23% lower than the renewal space. In lieu of free rent, they negotiated a rent schedule that gave SpecComm better cash flow.
“This is the third time we have utilized the services of Rich Commercial Realty for our office leases. They are a valued strategic partner and we welcome the opportunity to recommend them to others.”
–Dayton Matlick, President, SpecComm International, Inc.
Wall Street Journal Commercial Real Estate News
- Showdown Over Miami's Swank Set February 22, 2012One of South Beach's developers is creating a new shopping district in hopes of taking on Bal Harbour Shops, long the top draw for Miami's big spenders. […]
- 'Avatar' Blues for Builder February 22, 2012Development company Avatar Holdings has to change its name because of confusion with the popular "Avatar" movie. […]
- Showdown in Stamford for Developer Rosen February 22, 2012Developer Aby Rosen, who has been fighting headwinds to shore up his highly leveraged U.S. office buildings, faces a new threat, this one to his firm's large portfolio in Stamford, Conn. […]
- Texas's Hines to Double Down in London February 22, 2012Hines, one of the world's largest real-estate groups in terms of assets, is preparing to spend $1.6 billion on buildings in the U.K., doubling its assets in the country in an effort to diversify away from riskier acquisitions. […]
- Grubb & Ellis Seeks Quick Sale February 22, 2012Commercial real-estate firm Grubb & Ellis Co. filed for Chapter 11 bankruptcy protection, requesting an expedited sale as it faces $30 million in debt that matures on March 1 and insufficient cash to make it through the first quarter. […]
- Amazon Acquires Blocks in Seattle February 18, 2012Amazon is buying property in central Seattle with plans to construct about 3 million square feet of office space, a move that could have the company owning its headquarters for the first time amid big expansion. […]
- Ex-Banker Caught Up in Debt Brawl February 15, 2012A lawsuit provides a glimpse of the role being played by bankers-turned-consultants in the growing number of fights breaking out in the commercial real-estate industry. […]
- Mission West Hangs 'For Sale' Sign February 15, 2012The leading office landlord in California's Silicon Valley, Mission West Properties Inc., is preparing to sell itself to the highest bidder. But the selling price is likely to fall short of the $1.8 billion the company nearly fetched five years ago. […]
- Apollo Has Difficulty Landing Real-Estate Funds February 15, 2012Private-equity firm Apollo Global Management has raised only about $385 million for a real-estate fund, well short of its goal. […]
- Empire State Building Owner Plans IPO February 14, 2012The company that runs Manhattan's Empire State Building is planning an initial public offering that could raise as much as $1 billion. […]