Success Stories

Chicken of the Sea

San Diego, CA
28,769 SF
Cresa San Diego
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Client Objectives

Chicken of the Sea wanted to remain in their current building in Sorrento Mesa and renew their lease 20 months ahead of the lease expiration date while substantially reducing their occupancy costs. They are a major tenant in this office building and had occupied the space for nine years. The client currently has building top signage facing the I-805, which is an important branding tool for them. Chicken of the Sea was paying a significantly higher base rent than other tenants in similar projects, and they wanted to explore their options.

Results

Cresa worked with Chicken of the Sea’s management and developed a strategy to achieve all of their objectives. Initially, the landlord did not want to address this requirement mid-cycle, and instructed Cresa to wait six months. Instead, our team researched the existing debt on the current facility and discovered that the interest only loan on the project was maturing before the end of the client’s existing lease. Cresa also learned that the landlord was actively engaging the lender to renegotiate the debt situation, and needed to retain Chicken of the Sea as a tenant in order to restructure the loan. After a successful market search for appropriate comparable properties, Cresa enrolled other landlords who were motivated to pay for Chicken of the Sea’s remaining obligation and relocation costs. Our team successfully created a dialogue with the existing landlord and convinced them that competitors would negotiate lease rates below the rates which they were proposing. With this credible information, our client’s landlord reopened negotiations and reduced Chicken of the Sea’s rent substantially during the remaining term of the existing lease, extended the lease at current market rents, abated five months of rent payments, and provided them with a tenant improvement allowance which could be used towards retrofitting the space of future rent payments. The final terms of the negotiation contained over $1,000,000 occupancy cost savings. Our client now operates in their existing facility at a lower cost than they had originally projected, and realized a substantial cost savings a year before their original lease expiration date.

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