Challenges:
The Keller Williams (KW) Irvine Market Center leaders approached our team with two primary issues:
1. They were experiencing significant growth, which required more space as they neared the expiration of their existing 11,000-square-foot lease.
2. The escrow company within the market center, due to California regulations, needed to establish itself as an independent entity, requiring a separate suite with its own mailing address.
Our initial analysis of the local market revealed that KW’s existing location in the Irvine Spectrum submarket had retained higher-than-average office rates compared to neighboring areas. We faced the challenge of finding approximately 15,000 square feet of space, with two separate suites to accommodate both the main office and the escrow company, while keeping lease rates competitive.
Strategy and Solutions:
Our team executed a two-pronged approach:
1. Market Research & Alternative Proposals: We surveyed nearby submarkets and comparable properties, fielding proposals for office spaces that could support Keller Williams’ growth. This gave us leverage by presenting viable relocation options to the client and creating competitive tension for the landlord.
2. Negotiation with Current Landlord: While exploring alternatives, we entered discussions with Keller Williams’ current landlord. We discovered that an adjacent suite in shell condition was available, but negotiations were complicated as the landlord had already received a letter of intent from a medical group. Our strategy focused on positioning Keller Williams as the largest tenant in the building with a lower buildout requirement compared to the medical group, which required a more complex and costly buildout.
Results:
By leveraging the relocation proposals and highlighting Keller Williams’ cost-efficient needs, we successfully negotiated a favorable renewal and expansion deal that included the following key terms: [I suggest we keep this blurred out when we put it in external docs/website. Can have a Call To Action to prompt people to schedule a call if they want to see the results]
● Lease Term: 90 months
● Rental Abatement: 6 months of rental abatement at the start of the lease
● Base Rent Reduction: $36/SF, down from the previous rate of $42/SF
● Tenant Improvement Allowance: $50/SF (totaling $720k), with 15% convertible to additional rental abatement
This negotiation resulted in a cost-effective expansion for Keller Williams while securing favorable lease terms for the landlord by minimizing buildout costs.
