Savills Maximizes Space for Government Agency in Lease Renewal
In early 2009 with an imminent lease expiration, the Redevelopment Authority of the City of Philadelphia (RDA), along with affiliated entities - Philadelphia Housing Development Corporation (PHDC) and Philadelphia Office of Housing and Community Development (OHCD) - retained Savills to help secure a new office lease. The three agencies occupied the 16th and 17th floors at 1234 Market Street, the headquarters of the Southeastern Pennsylvania Transportation Authority (SEPTA), under two leases for ten years, and were open to moving to a new facility that was nearby City Hall. To support the mayor's new green initiatives, the agencies wanted to achieve LEED certification for the new space. The agencies also looking for better utilization of their space to accommodate new employees they planned to hire with fund received from the Federal TARP program.
The brokerage team initially looked into several spaces within a two-block radius of City Hall, but in a market with a limited number of large contiguous blocks of space available, options were minimal. When it became apparent that the most cost-effective option was to remain at 1234 Market Street, Savills proceeded to negotiate a lease renewal, while remaining open to relocation options. Given the many decision-makers involved - the directors of operations for each agency, as well as the mayor who chairs the RDA boards - the Savills team had to work diligently to bring all parties together and build consensus. The team proved instrumental in working with the three agencies on making difficult decisions regarding their shared space planning, timing and phasing of the improvements.
In the end, the RDA, PHDC and OHCD will remain in place, and will relocate to temporary swing space that Savills negotiated and secured on the 20th floor while renovations are taking place. The client was impressed with Savills ability to maneuver through the heavy political atmosphere to complete an amicable transaction on behalf of all parties. Savills negotiated a robust lease renewal that would enable the agencies to greatly improve their space to a level that exceeds any of the space options they considered. As part of the concession package, Savills secured base-building improvements including retrofitting the buildings HVAC system in order to meet LEED standards. The RDA, PHDC and OHCD, collectively, are now the building's largest tenant other than the building's owner (SEPTA).