Converting Annual Lease to Multi-Year Lease Results in 32% Savings

Success Story by Cloteen Jasmin for Georgia Vocational Rehabilitation Agency
Client
  • Georgia Vocational Rehabilitation Agency
Space
  • 10,086 sq. ft.
Locations
  • Atlanta
Services Provided
  • Transaction Management
Cresa Team
  • Cloteen Jasmin

Client Objectives

  • 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.

Results

  • 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.
Georgia Vocational Rehabilitation Agency

Have a problem with no real solution?

Contact Us