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Challenge
The client was the original building
tenant in 1977, and whose tenancy and signage had become a recognized
symbol in downtown Bellevue. The building was located in the downtown
core surrounded by all the downtown amenities, but because of its age
could not demand premium rents. The client’s main employment from this
office was traditional “back-office” work, so the ability to offer a
downtown address for its employment base, yet at reduced economics to
the client was a key motivator to extend the lease long-term. The
client had five (5) independent leases with only two (2) being
coterminous- all with over-market rents. The challenge was four-fold:
1. Re-trade the current economics 2. Negotiate a tenant improvement
allowance to refurbish the premises, 3. Reduce the client’s total square
footage, and 4. Extend the remaining square footage out several
years.
Strategy
The landlord had been recently been
engaged in re-trading leases in its portfolio but only those which
had proper circumstances: good credit tenant, stability of tenancy,
and sizable square footage. The strategy was to engage the landlord
into understanding the client would be a suitable and preferred
tenant for either: new construction in the downtown core, or an
anchor tenant in a suburban building, with the goal being for the
landlord to recognize the competitive environment and thereby drive
the best long term lease transaction to retain the client.
Result
A new ten (10) year term on one (1) lease
document, a reduction of the client’s total square footage by more than
20%, a healthy tenant improvement allowance that had an extended sunset
period, expansion rights, and an economic savings in the first year over
the former lease of more than half a million dollars.
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“Jason not only recognized and
leveraged the prevailing market forces to secure the best overall
value for the Bank, but also took the time to understand our
internal space needs which really yielded significant dividends.
Jason also is extremely familiar with the legal documentation. Our
internal counsel was delighted to work with someone truly concerned
with the detail of the transaction which can be so easily
overlooked.”
Joe Ullrich
Director of Corporate
Real Estate
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