Converting Annual Lease to Multi-Year Lease Results in 32% Savings
Success Story by Cloteen Jasmin for Georgia Vocational Rehabilitation Agency
Georgia Vocational Rehabilitation Agency
10,086 sq. ft.
Due to favorable location and good condition of the building, the Agency wanted to continue exercising its renewal options under the lease and remain in the space.
However, the State Properties Commission ("SPC") noticed that the rent for this location was unusually high when compared to the average market rents for similar buildings in Dalton.
In exchange for converting the annual lease agreement to a five-year lease, the landlord agreed to a 32% reduction in the rental rate from $29.17/RSF to $19.75/RSF.
The 2.5% annual rent escalations were eliminated and replaced with a flat rate for all five years of the initial term.
The excess operating expense provision was removed from the lease, eliminating the risk of additional charges. The multi-year lease has a 5-year renewal option at $21.75, which will also remain flat throughout the entire renewal term.
Additionally, Cresa negotiated a refurbishment improvement allowance of approximately $50,000, if the renewal option is exercised. Any unused refurbishment allowance
may be used as a rent credit.