Transaction Management
LEASE RENEGOTIATION LEADS TO COST REDUCTION
 
 
The Challenge

 

  • Our client was occupying 17,600 square feet at an annual occupancy cost of approximately $190,000.

  • The business environment changed since the initial lease was signed in 2013 and the client determined that only half the space was required for the current business.

  • The client was seeking to sublease their existing premises and relocate into a smaller location.

The Solution

  • Landmark reviewed the lease and current market conditions and determined that the existing lease rate was significantly above current market value and that the lease expiry date was approximately 18 months away.

  • Given the cost of subleasing and relocation, Landmark recommended a more cost-effective approach: renegotiation of the existing lease terms.

  • Landmark leveraged their strong relationship with the landlord and offered to facilitate an early lease renewal in exchange for an immediate downsize in rentable area and a reduction in net rental rates to reflect current market conditions.

  

The Result

 

  • Reduction in leased area from 17,500 square feet to 9,000 square feet

  • Reduction in net rental rates from $8.00 per square foot to $6.00 per square foot

  • Savings for the client: $75,000 / year