In March of 2001, Nortel Networks Mexico contracted Colliers International to review its leases in three different buildings located in Mexico City where the company was occupying a total of 9,445 square meters.  The company had taken up spaces in the Plaza Inn, Torre Mural, and Pedregal buildings as a result of client relationships that required project proximity.  Yet, once the company had completed these projects, it wished to close the satellite offices and centralize its operations.

Challenge
Since Nortel had a relatively short time to expiry on each of the leases, Colliers Mexico advised the company to exit early from the two undesired locations and consolidate in Torre Mural.  At this building the company was then paying around $34.00 per square meter while rental rates in the area were 25% lower on the average.   The challenge was to develop a financial strategy that would generate maximum savings and recuperate losses generated by penalties for early lease terminations.

Results
Nortel’s operations were consolidated in 6,255 square meters of office space in Torre Mural and the rental price per square meter was reduced significantly for the term of the new lease.  This transaction represented net savings to Nortel of over USD $1 million in  the first year alone.  The company was very content with the service provided by Colliers International and, subsequently, Colliers has performed additional lease renegotiations for Nortel Networks in several other markets throughout the region.

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