The Literacy Assistance Center occupied one and one half floors in 32 Broadway. Principals from Interrelate Group analyzed the covering lease documentation and found that LAC was paying an escalated rent that was ten dollars per square foot above current market valuations. A reprogramming of the space requirement exposed severe design inefficiencies in their current layout. LAC emphasized the need for upfront savings which became the driving force behind our strategic recommendations.
Course of Action
The time cushion made possible by a future lease expiration date allowed us to watch as the market declined during a six month period. Meanwhile, we identified alternative spaces opportunities wherein the ownerships were willing to enter into a lease buyout agreement. Leveraging the marketplace, we approached LAC’s current Landlord to negotiate an early termination of the lease at 32 Broadway and a relocation transaction involving a smaller space in 39 Broadway. The Landlord agreed to terminate the organization’s remaining obligation at 32 Broadway and assumed the entire cost of building out the new space.
The early termination and relocation transaction afforded The Literacy Assistance Center immediate and substantial cost savings, increased operational efficiencies and the organizational uplift due to a vastly superior office installation.