Unconventional negotiations secure long-term savings

CHALLENGE

Consolidate from aging inefficient campus, increase collaboration and innovation, reflect industry leadership

Panasonic Avionics engaged its long-time global real estate advisors at Savills for assistance in locating a compelling new location to consolidate its HQ workforce, which was spread across a seven-building campus in Lake Forest, CA. Its location was inconvenient for its employees and customers, and lacked the modern design and infrastructure the company needed – from available on-site amenities to sufficient power and parking. The company was seeking a way to simplify its numerous lease obligations to set the stage for a move, and to find a location and facility that would enhance employee workplace experience, increase collaboration and operating efficiency, provide a convenient nexus for HQ operations, and support the company’s brand as an industry leader and innovator of inflight entertainment and communications systems.

SITUATION

High-profile location with easy airport access, customized state of the art facility, mixed-use location with abundant tenant amenities, and development with award-winning sustainability credentials

The Savills team entered into lease extension negotiations with Panasonic Avionics’s respective landlords to create co-terminus lease expirations, and sourced new location options to satisfy the company’s branding, workforce experience and operational requirements. Ultimately, the team executed a 260,000 SF lease for Panasonic Avionics to relocate nearly 90% of its workforce to Park Place, a 2 million SF mixed-use development with award-winning sustainability credentials on 105-acres in the heart of the Airport Submarket, Orange County’s CBD. Additionally, Savills saved the client over $10 million by negotiating an above-market landlord concession package, including significant rental abatement and flexible terms to contract, expand and extend. Savills also negotiated a separate agreement allowing Panasonic Avionics to maintain a 70,000-SF presence at its Lake Forest campus through 2027.

RESULT

Convenient new high-profile HQ and talent magnet

Park Place, which will officially become home to Panasonic Avionics’s employees in December 2021, includes ample parking, high-end amenities, state-of-the-art common spaces and convenient access to the area freeways and John Wayne Airport. The campus also offers a hotel, condominiums, apartments, several restaurants and shops, an onsite health and fitness center, a 400-seat food court and multiple conference rooms. The customized HQ build-out is designed to enhance workplace experience, collaboration, productivity and innovation.

A key decision-making factor was the commitment shared by both landlord and tenant to sustainability. Park Place is Fitwell-certified, achieved UL’s verified Healthy Building Mark for Indoor Air Quality, is LEED EB Gold re-certified, and is a recipient of the Energy Star Sustained Excellence Award from the US Environmental Protection Agency and Department of Energy. The development offers abundant EV charging stations, receives 75% of its energy from National Green-e Certified renewal energy credits, and reduces utility costs by shaving peak loads with its Stem Battery Storage – the largest such storage project on the west coast.