Tech firm gains efficiency, signage rights in lease renewal
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CHALLENGE
Over the years, Questrade’s headquarters had spread out over 70,000 square feet in a twin-tower, 1 million square foot Class A office complex known as the North American Centre, at 5700 Yonge Street. The complex is in a highly desirable urban/suburban neighborhood well-served by public transit. The problem the company faced was that its space was fragmented and spread out across four different floors between the two buildings. Questrade hired Savills to help it optimize its space and try to consolidate onto contiguous floors in one of the towers, while expanding its footprint to accommodate additional growth. However, it was well ahead of its lease term, and the complex was dominated by three larger tenants, each of whom had first rights on any available space in the complex.
SOLUTION
Against some internal competition for the scarce vacant space in the complex, the Savills team knew that finding a large contiguous block of space would be a tall order. First, Savills learned that another tenant’s position in the building might be at risk, which made retaining Questrade more valuable for the landlord. On a parallel path, Savills leveraged a purchase option for a building just down the street. Ultimately, Savills managed to secure close to 137,000 square feet on five contiguous floors in one tower, near where Questrade’s extensive IT infrastructure was already located, avoiding an expensive move. Savills leveraged its long relationship with the landlord, Manulife, to negotiate some unique provisions in the lease, including exclusive top-of-the-building signage rights, even though Questrade occupies only about 20% of the building.
RESULTS
The Savills team secured an above-market tenant-improvement allowance to offset half of the remodeling costs. In year 8 of a 10-year lease, Questrade enjoyed below-market rents. Despite seeking an early renewal, Savills was able to lock in good space and good benefits, including options to renew and comprehensive expansion rights. The deal was good for both sides, as Questrade is on a growth trajectory and likely to expand further within the complex.
COMPANY DESCRIPTION
Questrade (www.questrade.com) is Canada’s fastest growing online brokerage that is changing the Canadian financial services industry by leveraging technology to lower fees while providing a viable alternative to traditional financial investment options, thereby allowing Canadians to Keep More of their Money. As a leader and innovator in financial services, Questrade is a trusted ally that advocates for consumers, focused on improving value. Questrade and its companies provide financial products and services: securities and foreign currency investment.