CASE STUDY: The College of Family Physicians of Canada

 

The Challenge

 

The Tenant occupied 30,966 SF on multiple floors within 2630 Skymark Avenue, and had a lease expiry of December 31st, 2015. There was a Termination Right available which could be exercised on December 31st, 2011 with one year’s written notice to the Landlord (Bentall Kennedy). The Tenant anticipated growth and their existing layout no longer met their needs.

 

The Solution

 

CBRE immediately embarked on negotiations with the Landlord for a reduced rental rate which was leveraged by extending the existing term and an increased footprint in the building. Two properties were selected as stalking horses to capitalize on the existing soft market conditions. CBRE resumed negotiations with the existing Landlord, revealing the viable relocation alternatives, and thus providing the Tenant with significant negotiating leverage.

 

The End Result

 

The Tenant expanded into an additional 13,181 SF and extended their term for an additional 5 years. Through negotiations, the Tenant saved $500,000 and their basic rent decreased between $2.50/SF and $3.00/SF per year, along with a Tenant Improvement Allowance of $17.50/SF for both the existing and expanded premises (a value of $772,000).

 

Quick Facts

 

• Termination right leverage
• Expanded and extended term for 5 years
• Significant monetary savings up front and throughout the remainder of the term