Success Stories

L-3 Communications

San Diego, CA
30,097 SF
Cresa San Diego
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Client Objectives

L-3 Communications was leasing approximately 40,000 square feet of an approximate 181,000 square foot building that they had previously fully occupied.  The space that they had consolidated into was neither functional nor efficient for their reduced requirement.  Furthermore, inherent in their lease was a restoration clause that would require them to remove intricate equipment from numerous highly improved labs at an enormous cost.  At the same time, L-3 Communications was focused on cost savings from an overall corporate perspective.  Cresa was brought in to find a facility, within 5 miles of the current location, with an efficient floor plate that could accommodate their use while reducing the total square footage to approximately 30,000 square feet.

Cresa Team Members

Results

After touring the appropriate submarkets, the only submarket that met the facility requirements was the most expensive.  Additionally, there was only one building in their current submarket that could handle their requirement but the landlord was not willing to divide the building to accommodate L-3 Communications.  While negotiating with three landlords in the most expensive submarket, Cresa continued to communicate with the broker representing the one opportunity in their current submarket.  After extensive negotiations and reaching “best and final” terms in the expensive submarket, Cresa made a final call to the broker representing the one possibility in their current submarket.  Impressing on that ownership that having a lease with L-3 Communications could increase the value of the project based on their credit rating, and communicating L-3 Communications’ willingness to ensure that any remaining space would be leasable, the landlord agreed to consider splitting the building.  We then toured, reached agreement on a demised location in the building, quickly negotiated terms and conditions considerably less expensive than the terms in the more expensive submarket, and L-3 Communications ultimately signed a lease that saved them approximately $500,000 over a five year lease term. 

Additionally, during the negotiation process, Cresa learned that their existing building was for sale.  Understanding that any eventual buyer would likely demolish the existing tenant improvements, Cresa suggested that L-3 Communications offer a cash settlement at a fraction of the estimated restoration cost.  The selected buyer agreed to the cash settlement providing L-3 Communications with additional savings.

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