This post originally appeared on tBL member Lynn Drake's blog Compass-Commercial Blog | Expert Commercial Leasing Advice and is republished with permission. Find out how to syndicate your content with theBrokerList.
The Michigan Women’s Foundation had negotiated to buy a building with a developer when the transaction fell through. They approached Compass Commercial 6 weeks before their lease was due to expire for help. Their offices were in Detroit. The landlord, planned on raising the rental rate by $2/s.f., which would put them in line with the market. Additionally, the parking that was originally free, was going to increase to $250/spot/month.
WHAT WE DID:
Compass approached the landlord to renegotiate a better rental rate. With such a hot market the landlord refused to budge. The nonprofit wanted to stay in the City of Detroit to be accessible to their customers, so Compass set out to find affordable options for the nonprofit with 6 weeks before holdover fees set in.
Within 3 business days Compass set up tours with the President of the organization to look at 4 different buildings, where the parking rate was substantially less.
Compass found a sublease that met the client’s needs and had significantly reduced parking rates. The Sublessor was also a nonprofit, which conveniently allowed both organizations to work together and strengthen their cause.
The new space was 30% larger than their previous space and included a great deal of free furniture.
The new space provided an open work environment that encouraged collaboration in the work place.
Compass Commercial was able to complete the transaction for the new space in time to move out of their previous building in time to avoid hold over fees.
Client avoided a $50,000 annual increase in rent by relocating.