Savills Saves Substantial Costs for Greater Media with New Space 20% Larger than Previous Location
Greater Media, a broadcast and publishing company, had been leasing approximately 33,000 square feet at Philadelphia’s One Bala Plaza, where the firm housed three radio stations. The company had approximately one and a half years remaining on its lease and wanted to expand. In 2007, Greater Media had acquired a company in central New Jersey that owned and operated two radio stations. Rather than have the newly acquired stations continue broadcasting out of New Jersey, Greater Media wanted to move the operation into its Philadelphia facility.
Aside from the unconventional challenges of having “shock jock” antics taking place in a conventional office building that also houses much more conservative tenants such as Philadelphia Insurance, creating the necessary leverage in the marketplace was a difficult task. It was widely known that moving into new leased spaced would have been cost prohibitive as the build-out costs for studio space would be exorbitant. Savills addressed this by creating an alternative stay-put option that involved selling an asset that Greater Media was currently leasing to Comcast and acquiring a new one through a 1031 exchange that would serve as the company’s new Philadelphia facility. This strategy yielded the results that Savills was aiming for—the building owner, Tishman Speyer, drastically lowered the rental rate it was asking and increased the tenant-improvement allowance significantly.
Savills secured a lease for approximately 40,000 square feet, 20% larger than its previous space, while saving the client in excess $750,000 over the 10-year term of the lease extension. In addition, several provisions were required in order for this type of business to function alongside businesses that were typically seen in traditional Class A buildings, such as permission to run special promotions in the building’s common areas.