Case Study

Unum

Challenge

Unum’s 700 employees in Worcester work in its 385,000-square-foot complex, which operates at above-market operating costs due to its age, required significant capital expenditures and is inefficient in terms of its space usage. In late 2007, Unum retained Colliers International to conduct a feasibility study for the firm’s real estate in Worcester as part of an ongoing, long-term real estate strategy.

Strategy

At the time, Unum asked Colliers to compare its annual occupancy costs per employee on a net present value basis to a variety of alternatives. Colliers analyzed numerous scenarios including selling all or a portion of the complex, demolishing the complex and building a new facility on the site, and relocating to a number of other properties. Colliers surveyed the market and determined seven possible relocation sites. Ultimately thirteen different scenarios were modeled for Unum, including a disposition strategy for the entire complex.

The final study provided Unum with background information on Worcester’s economy, demographics, largest employers, employment trends, public subsidies, and residential, retail, industrial, and office real estate market conditions. We also summarized all recent and proposed new developments in Worcester and evaluated the nearby 495 West suburban office market. The analysis included a review of current employee commuting patterns and the impacts of relocation on employee commutes.

Results

Following a thorough investigation of urban and suburban alternatives, Colliers was able to leverage the marketplace and negotiate very favorable terms and conditions for Unum. In addition to the favorable lease terms, Unum also benefitted from a 15-year Tax Increment Financing Agreement with the City of Worcester, which was signed in June, 2009.

Most recently, Colliers International negotiated a build-to-suit lease for approximately 200,000 square feet at CitySquare in Worcester and will also be handling the disposition of Unum’s current complex as part of a comprehensive strategy surrounding the firm’s eventual move to CitySquare.

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