The Council on Accreditation (COA) was located on the 11th floor of 120 Wall Street, 34-story office tower that was the subject of a pioneering plan under the Dinkins Administration in 1991 to create a center to accommodate not-for-profit organizations. Under the plan, the NYC Industrial Development Agency took title to approximately 400,000 square feet of the total 615,000 square feet and leased the space back to the landlord, Silverstein Properties. Silverstein, in turn, offered the space under a sublease arrangement to not-for-profit companies that could take advantage of an exemption of real estate taxes. COA, being one of the first entities to take advantage of the plan, was facing an expiration of its sublease. A renewal of the lease was a possibility. The Industrial Development Agency plan, however, would expire at the same time. The challenge for COA was to find cost-effective suitable space that permitted the organization to remain in the downtown financial district in the absence of the real estate tax exemption that had been so important to the organization’s bottom line. The goal was to achieve occupancy costs that were roughly equivalent to those enjoyed under the exemption plan but below the proposed renewal rates at 120 Wall Street.
Course of Action
Principal members of Interrelate Group guided COA through the relocation process that included an analysis of the organization’s long-term business, workforce, aesthetic and occupancy needs. We assisted in the selection of an architectural firm and advised COA throughout the site selection and construction phases. We compared the existing renewal opportunity to the various options within the market while taking into consideration the special needs and concerns of COA’s not-for-profit status.
COA executed a lease for a full floor at 45 Broadway Atrium, a Class-A structure built in the mid 1980’s, and located in the heart of the Downtown Financial District. The landlord provided a complete build-out of the space including numerous above-standard features within the rent structure, which was 10% below the proposed renewal rate at 120 Wall Street. Due to our careful analysis of market trends, COA is currently taking advantage of occupancy costs that are fully 25% below rates quoted for space available in the building.