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CASE STUDY: Express Scripts Inc.

Express-Scripts-Inc

Key Information

Client

Express Scripts Inc.

Location

5770 Hurontario Street, Mississauga ON

Topline

Exercised Renewal Option and extended term for 7 years

Size

30,553 sq. ft.

Timeline

Q3 2011 to Q3 2012
 

 

The Challenge

 

The Tenant occupied 30,553 SF on multiple floors within 5770 Hurontario Street, and had a lease expiry of May 31st, 2013. The Tenant had a Fixed Renewal Option for two years that could be exercised with nine months written notice to the Landlord (Orlando Corporation). The Tenant engaged CBRE to review their current situation and market conditions to determine if executing their Renewal Option was the optimal strategy.

 

The Solution

 

CBRE immediately performed a lease audit and produced a systematic report summarizing the Tenant’s current situation. Unfavourable terms to be re-negotiated were identified. A tour of competitive properties was concurrently conducted to create speculation in the market about the Tenant’s pending expiry. The intent was to get this speculation back to the Tenant’s current Landlord in order to improve the Tenant’s negotiating position. CBRE selected a property as a “stalking horse” to capitalize on the growing speculation about the Tenant’s relocation efforts, and obtained their best offer as an alternative solution. With significantly more leverage than before due to a strong alternative option (verified by market speculation), negotiations were started with the Landlord.

 

The End Result

 

The Tenant renewed their lease for a seven year term to May 31st, 2020. Through negotiations, the Tenant saved approximately $450,000. The Tenant maintained flexibility with an Option to Terminate after Year 3 and a Right of Fist Offer. The negotiations also resulted in a Tenant Improvement Allowance of $10.00/SF for the premises (30,553 SF) or $305,530, as well as top of building signage.

 

Quick Facts

 

  • Renewal Option Negotiation
  • Extended term for 7 years
  • Significant monetary savings up front and throughout the remainder of the term

Express Scripts Inc

Connect With Us to Learn More

David Potter
David J. Potter*
Executive Vice President, Office Leasing
Advisory & Transaction
*Sales Representative
+1 416 798 6239
+1 416 271 1373
+1 416 674 6575
John Potter
John Potter*, MBA
Senior Vice President, Office Leasing
Advisory & Transaction
*Sales Representative
+1 416 798 6242
+1 647 501 3832
+1 416 674 6575
Kathryn Schubert
Kathryn Schubert*
Vice President
Advisory & Transaction
*Sales Representative
+1 416 798 6234
Kristine Doner*
Marketing Coordinator
Advisory & Transaction
*Sales Representative
+ 416 798 6283