Savills Helps ACVB Secure $2.1 Million Concession Package in Lease Renewal
The Atlanta Convention and Visitors Bureau (ACVB), one of the most prominent tenants in the Atlanta business community, engaged Savills to develop and implement a strategy that would address its need for growth and enhanced space efficiency. ACVB had been a tenant at Peachtree Center since the 1960’s and had grown in an inefficient, patch-work fashion leaving no room to add employees. Prior to engaging Savills, the organization had looked at non-contiguous expansion as a short-term solution given that there were five years remaining on its lease. Savills determined, however, that despite the term remaining on ACVB’s current lease an opportunity existed to reduce occupancy costs.
Peachtree Center had recently been acquired by a Florida-based ownership group whose goals included re-branding the complex as the focal point of downtown. With this in mind, Savills leveraged ACVB’s unique attributes, which included being one of the largest tenants in the 2 million-square-foot complex and the symbol of positive activity and growth in downtown Atlanta. We were aware that the building owner was considering plans to redevelop the part of the complex that housed ACVB. The challenge for ACVB was to add space in a manner that did not have a material impact on its GAAP costs, knowing that the building was 35% vacant and the landlord would be reluctant to reduce cash flow on an above-market lease from a large tenant.
Savills leveraged the desirability of retaining ACVB as a long-term tenant at Peachtree Center and the organization’s desire to relocate within the complex. Savills negotiated for the organization to move to a part of Peachtree Center with a larger, contiguous footprint. The lease encompassed 50% more space at a below-market rental rate with no increase in annual GAAP costs and full landlord funding of all construction costs. Savills strategy ultimately secured concessions in excess of $2.1 million for the bureau.