Office Concepts, a provider of workplace solutions and the largest Steelcase dealer in the Midwest, was seeking to reduce their occupancy costs in their 130,000 SF Lake County distribution facility and extend their lease term. Office Concepts was committed to their lease for 18 months at an above market lease rate. The company also desired to remain in the immediate area because of their customer base and the high quality of their existing building. Operating under these restrictions, Fred Regnery identified an opportunity to reduce Office Concepts’ lease rate retro-actively and created a process to achieve results that exceeded their savings estimations.
By utilizing his knowledge of competing deals, Fred identified that Office Concepts current lease was above market by 15 – 20%. By identifying competing Landlords that were willing to offer a combination of free rent and a lower base rent, Fred procured multiple proposals that made a compelling case for Office Concepts to move and create immediate savings from their current lease. Utilizing the competing lease proposals as leverage against their current landlord, Fred was able to use the probable threat of Office Concepts leaving to substantially reduce the lease rate at their current building for their 18 months of remaining lease term and extend the term at a lower rate than the original lease extension option specified.
By identifying the low-cost alternative in the market and creating a scenario where Office Concepts might leave to a new building at a lower rate, Fred was able to renew and extend Office Concepts at their current, preferred location at a substantial savings. Office received a $172,000 rent reduction for the remaining 18 months of their lease term and extended their current lease for 10 years at a 15% annual savings.