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A Step Up in Class Without a Step Up in Cost
Our client is a leading specialized supplier of a diverse range of steel products and a major supplier of pipe for the oil and gas industry. We had previously negotiated a challenging midterm expansion when we first started working with them. We were called upon once again when the leadership was in the process of spinning out of the parent company and relaunching as an independent business aligned but separate from the parent. In order to facilitate the establishment of a new company culture and identity, management’s objective was to seek new offices that would be a step up in class without a step up in cost.
We initiated a search utilizing local knowledge, our relationships with top landlords and brokers, industry databases, word of mouth, social media and direct emails to meet the company’s objective for new headquarter office space. At the same time maintaining the desired confidentiality to coincide with their name change and launch. As a result we created maximum leverage for our client by identifying multiple, viable alternatives for their new headquarters. Without leverage, there is no negotiation.
Working together with the company leadership, we identified a step up in class from their 3-story courtyard shared office to the top floor of a Class A building with a world class view of Mt. Diablo. The company increased the size of their space and established a distinctive new company identity at below market rate. Without leverage, a step up in class at below market rate is not possible.
Then, as a rapidly growing enterprise, we were called on again for another midterm expansion. Predicting a new company’s growth on a timely basis is tough to do and our client found themselves in the middle of a lease and in need of more space. Preferably in the same location.
It’s often overlooked by tenants but landlords matter. We are always careful to pick not just good buildings but good landlords and work to create a good relationship with them. It’s not always possible to expand in the same building midterm so we did a complete market search to identify viable alternatives. As a result of our having a good and cooperative relationship with a quality landlord and the leverage of viable alternatives, we were able negotiate a relocation option in the landlord’s adjacent building. With minimal disruption, once again our client’s office was on the top floor of a Class A building with an even better view of Mt. Diablo.