Savills Discovers Most Cost-Effective Solution by Performing an In-Depth Renewal Versus Relocation Analysis
Forsman & Bodenfors (formerly Kirshenbaum Bond Senecal + Partners) had been located at 10 Hudson Square for six years, having grown to occupy two full floors, part direct and part sublet, all due to expire in four years. Forsman & Bodenfors was experiencing growth that required them to secure additional space, but they did not want to incur the capital cost to fit out the new premises. Forsman & Bodenfors also did not want to commit to additional space within the building without a commitment from the landlord that would allow them to extend, on a direct basis, both their leased and subleased space.
After performing a renewal vs. relocation analysis, Savills helped Forsman & Bodenfors determine that renewing and expanding directly with the landlord was the most cost-effective solution to accommodate their future occupancy needs.
Savills orchestrated a three-party agreement in which the portion of the space that Forsman & Bodenfors sublet would be converted to a direct lease with the landlord, and the sublandlord would forego its renewal rights and terminate its lease. In addition, Savills provided both the landlord and Forsman & Bodenfors with the analysis to show how a deal could be structured for new expansion space which would provide Forsman & Bodenfors with enough rent concessions to defray the cost of a complete build-out.
Savills enabled Forsman & Bodenfors to immediately grow its space by 30% and satisfy its long-term occupancy needs in their current location. This was achieved via a new 10-year lease for the expansion premises and a 6-year extension of their existing space. An above-market concession package was secured for the new expansion floor by convincing the landlord to give Forsman & Bodenfors concessions that would be customary on the future extension of the lease for the existing space and allow Forsman & Bodenfors to apply all of those concessions to the one new expansion floor. In addition, Savills provided for future expansion options and renewal options.
Several years later, Savills assisted Forsman & Bodenfors to expand its premises by another 30% and extend the lease.