Case Study

Academy for Educational Development

Nonprofits and Associations

Savills Helps Nonprofit Leverage Soft Market in Relocation


The Academy for Educational Development (AED) had been a long-standing Savills client in Washington, D.C. Over the course of a 15+ year relationship, Savills advised AED on several real estate transactions totaling over 300,000 square feet. In 2009, AED turned to Savills for help with its New York City office lease, more than two years in advance of its existing lease expiration. At that time, the city’s real estate market was experiencing softness, which Savills recognized afforded AED a narrow window of opportunity to upgrade its space. In addition, AED had long-term contracts with its New York City clients allowing the organization to sign a long-term lease to gain additional leverage.


Savills performed a thorough analysis of the overall occupancy situation in New York City for AED and spied an opportunity to upgrade to a better building with a built-to-suit, state-of-the-art installation while decreasing occupancy costs on a long-term basis. Following a complete market survey that included a stay-put renewal analysis, as well as all available properties in the submarket, Savills presented numerous options, including a forward commitment if AED were to move at the end of its lease term. AED’s landlord was at risk of foreclosure, due to the sale of the building AED was in, which had been previously sold at the peak of the market. Furthermore, the building was being managed by an out-of-town special servicer, making it more difficult to negotiate a renewal.


Savills first strategy was to try to negotiate a favorable renewal; however, as negotiations began, the special servicer began marketing the property for sale to appeal to a higher-end clientele. As a result, it became difficult to renegotiate at a more favorable rate, making a move within the same submarket more desirable.

With two years left on the lease, a new landlord would either have to offer significant free rent or deliver space two years after AED’s existing lease expiration. Due to the soft market, Savills was able to find three opportunities with landlords offering forward commitments. After several rounds of negotiating, leveraging each deal against the others, the final transaction enabled AED to take two full floors in a building just a block away with a brand-new installation. Savills negotiated a 15-year fixed-rate lease with the tenant’s right to cancel after 10 years at no penalty. In addition, the landlord built the space for AED with no out-of-pocket cost. This new lease was agreed to over two years before the move-in date and AED did not pay any double rent.

Soon after the lease was signed, AED merged with another organization and no longer required both floors. Savills was quickly retained to sublease a full floor. Within 90 days, Savills found a subtenant, and the resulting sublease was signed before the landlord began construction. The subtenant was able to design the space to its liking and move in during the original timeframe. Thanks to Savills expert negotiations, the sublease resulted in additional profit to AED.


AED, which merged with Family Health International in 2011 to form FHI360, is a nonprofit organization working globally to create enduring solutions to critical problems in health, education, social and economic development.