Trust Company of the West had a termination option coming up and was paying significantly under market rent. The firm had no interest in expending capital to pay the termination fee and then spending even more capital to construct new facilities. They were comfortable and content in their current lease situation.
Cresa suggested to TCW that there could be value in the termination option even if they never intended to exercise the right. TCW was occupying inefficient space that was originally designed and built in 1991. Even though the private agenda did not include any interest in moving, the Cresa team had modern and efficient space plans prepared at a competitive building and negotiated a potential new transaction.
With all the supporting documentation to rationalize the cost of relocating, Cresa was able to convince the existing Landlord to pay TCW almost $5M to simply give up their right to terminate. TCW did not have to increase their remaining obligation and they were able to maintain their below market rent while receiving the $5M payment.
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