Sprint Communications, one of the largest telecommunications firms in the United States, maintained its largest switch site in the New York metropolitan area where it occupied approximately 93,000 square feet of space for both telecom and office premises. With the lease expiration coming up over the next 18 months, Sprint was tempted to exercise its five (5) year renewal option at 100% of the prevailing market rate for the building given their preference to remain in the building. Since they felt that they were a captive audience to the landlord given their multi-million dollar infrastructure investment including switch gear, back-up generators, fire suppression systems, fuel farm, etc., they were reluctant to bring in a real estate firm to negotiate a better deal for them.Action Plan
Trident was brought in and created a four (4) pronged strategy that created a compelling scenario to the existing landlord that Sprint was capable of moving to a new location. As part of the strategy, Trident told the existng landlord that given the obsolescence of the the existing switch technology in place, that the residual value was minimal and that new capital costs would have to incurred either in the existing facility or elsewhere for updated equipment. The discussions with the landlord were coupled with the development of comprehensive RFP's that were sent to a select group of buildings which had the requisite infrastructure such as redundant power, mulitple points of entry for fiber, ample power source, sufficient conduit runs, etc. Result
By creating leverage in the marketplace, the existing landlord realized that there was a strong possibility that Sprint could and would relocate. Trident was able to secure a favorable long-term lease at a 20% reduction from what they would have paid on their renewal option. The end result was a $15 million savings over the term of the new lease.
Emisphere Technologies, a 100,000 square foot mid-stage biotechnology company, had a facility that consisted of a combination of chemistry and biology labs, radioisotope rooms, vivarium, etc., and office space; was looking to reduce its energy costs and secure a favorable long-term lease in a rising real estate market. Their geographic parameters were within 20 miles of their current site. Action Plan
After creating a needs assessment profile and developing a programming study of lab and office space requirements, a construction manager was brought in to quantify estimated total project costs to move to a new facility. A study was also initiated to determine whether the existing "powerhouse" that was providing utilities to the site and the respective air handling units for Emipshere, was operating in an efficient manner consistent with the American Society of Heating, Refridgerating and Air Conditioning Engineers (ASHRAE) standards. During this process a site search was performed identifying a handful of biotech facilities that could accommodate the functional, operational and technical needs of the client. Thereafter, RFP's were submitted to the various landlords followed by rigorous financial analyses of all of the candidate property responses. Result
After over 12 months of parallel negotiations with the various landlords, Trident was able to leverage Emisphere's position in the marketplace by securing a 23% reduction in the rental rate on a renewal along with a $25 per square foot work allowance. This in turn was coupled with the existing landlord renovating the existing "powerhouse" resulting in a 20% utility cost savings for Emisphere.
The Canadian Government's Mission to the United Nations occupied 30,000 square feet on part of a floor in a building where its lease was due to expire over the next 14 months. Their existing premises were on a floor that was inefficient from a footprint perspective and lacked ergonomic design elements. The building also had an unreliable heating and air conditioning system that required constant rebalancing. An additional issue related to the fact that the security on the floor and in the building did not comply adequately with Canada's rigorous security requirements as were in place for its governmental facilities around the world. The challenge was to find an alternative location that was near the United Nations that would not only enable them to occupy an entire floor, but could be accomplished by their lease expiration that would not be hampered by the new requirements for vendor selection based on the North American Free Trade Agreement (NAFTA). Action Plan
Given the geographic parameters of the government, Trident's site search was limited to viewing properties as far west as Third Avenue and as far east as First Avenue in New York's United Nations submarket. Subject to the site search criteria, a survey was put together for feasible locations. Once the properties were viewed, a short-list of candidate properties was put together followed by the development and submission of RFP's to the selected properties. The discussion with the different landlords relating to the strong credit nature of the tenant provided for greater leverage in the negotiating process. Result
Although the process was somewhat more cumbersome given issues surrounding the NAFTA provisions, the Mission was able to relocate to a full floor in a building that was a block from its current location. A favorable long-term lease was negotiated providing the Mission with a floor plan and design features that were more conducive to its objectives as a governmental entity. The building also provided the Mission with enhanced security not only as a full floor tenant, but also for those individuals entering the building.