Renewal vs. Relocation: SpecComm International, Inc. Case Study
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.
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.
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.