Leveraging the Market to Recast a Lease

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Client
  • Precision Drilling Corporation
Space
  • 59,569 sq. ft.
Industry
  • Energy
Locations
  • Houston
Services Provided
  • Transaction Management
Cresa Team
  • Sue Rogers
  • Steven Heal
  • André Granello

Client Objectives

  • Precision Drilling wanted to determine if they should terminate its current lease three years before expiration to potentially relocate to a more economic situation.
  • Cresa advised that leveraging the surplus of sublease space in the Energy Corridor/Westchase submarkets would produce a more advantageous economic outcome.
  • Putting a huge focus on employee recruiting and retention, Precision Drilling wanted to modernize its office space and provide easy access to first-class amenities.

Results

  • Engaging the market during a highly competitive tenants' market, with an abundance of deeply discounted sublease opportunities, provided maximum leverage.
  • Cresa identified several potential options that that maximized the tenant's position creating a potential threat of loss to the current landlord 
  • The amended lease provided a substantially lower rental rate, generous TI package and free parking for the extended five-year term.
  • In all, Cresa created more than $2.8 million in real estate savings for the client.
Precision Drilling Break Room
Precision Drilling Hallway

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