Chatsworth Business Park &
Lurline Business Park

Landlord Services




Challenge:
Walton Street Capital owns over 322,000 SF of multi-tenant industrial product in the West San Fernando Valley. Six units were vacant in Fall 2008 with fifteen additional leases set to expire in 2009. Vacancy was rising dramatically for units ranging from 2,000 to 15,000 SF in the West San Fernando Valley with over 100 available units in the submarket.
Strategy:
Rather than waiting for the market to deteriorate further, in November 2008 the team advised the landlord to get aggressive and lower the first year asking rate to half off on a five year lease. TEAM DeGRINIS also advised their client to offer a bonus commission to the procuring broker. No other competing landlords were offering these incentives at the time. In addition, the team enacted an aggressive marketing strategy through door-to-door cold calling and follow up.
Results:
Within only six months, TEAM DeGRINIS completed eight new lease deals, as well as eight lease renewals. The team also discovered that procuring brokers had a tendency to submit the available units at these business parks to their clients first and foremost, knowing the first year rate benefits their client, and the bonus fee benefits the broker.
15955 & 15963 Strathern Street
Van Nuys, CA

Tenant Services




Challenge:
LaBrea Bakery, Inc. occupied a 129,469 SF Class-A industrial building for its baking and distribution of its world class artisian bread products. The company was only utilizing half of the building and had significant infrastructure and sunk costs into their manufacturing / baking operations. Additionally, LaBrea Bakery was paying a lease rate well above current market lease rates and desired immediate rent relief.
Strategy:
TEAM DeGRINIS met with LaBrea Bakery and analyzed long term and short term goals with them. Together, the team and client decided to put 63,136 SF of distribution space on the market for sublease and approach the landlord with a “blend and extend” lease scenario for the manufacturing portion of the building.
Results:
TEAM DeGRINIS secured a Fortune 500 company to sublease the 63,136 SF distribution space, and subsequently structured that as a direct lease with the landlord, releasing LaBrea Bakery from any lease obligations on that portion of the property. The team then used this scenario to leverage an advantageous “blend and extend” lease scenario for the remainder of the building between the landlord and LaBrea Bakery.
15814 Strathern Street
Van Nuys, CA

Landlord Services




Challenge:
The landlord needed to lease their property in a market where users were hesitant to commit long term and transaction volume was scarce. The building was in a great location, but challenged by its low ceiling height and lack of corporate image. Vacancy for similar product was rapidly increasing, and few tenants in the market had enough clarity in their business to commit to a long term lease or move to a new building.
Strategy:
The team saw the trend moving towards increased competitive vacancies and decreased tenant activity. The team advised their client to get aggressive and lower the first year asking rate to $0.39 NNN psf and offer a bonus commission to the procuring broker to create activity. The team also focused its marketing into three segments: brokers, tenants occupying multiple facilities and the entertainment industry.
Results:
The team learned of a requirement that fit. Though the tenant was hesitant to look as far west as Van Nuys, they were economically incentivized enough to tour the property. The tenant, Mates, Inc., would only commit to a six month lease for a portion of the building. The team advised the landlord to agree to this with the hope that Mates would become “rooted” in the building. Four months later, a five year lease for the entire building was signed, and the property leased prior to any of its competitors.
29011 Commerce Center Drive
Valencia, CA

Tenant Services





Challenge:
Arvato Digital Services occupies a 165,141 square foot building. The lease was expiring in twelve months and Arvato had an option to renew at fair market value. Arvato intended to exercise its option to renew, but the landlord had offered lease renewal terms that were not satisfactory to Arvato. Arvato wanted to take advantage of the market and obtain ideal lease terms, but was concerned that their significant office infrastructure created difficulty in moving. This situation created a perceived disadvantage in negotiating with the landlord.
Strategy:
TEAM DeGRINIS was hired by Arvato to work on their behalf. The goal was to renegotiate the lease renewal while keeping other market options as possibilities. The team put the landlord in a competitive situation with other market opportunities to ensure a favorable outcome for Arvato.
Results:
The team negotiated a lease renewal for Arvato at a lease rate that was approximately 20% less than the landlord originally offered before Arvato hired Colliers. The end result was that both Arvato and the landlord were pleased to have the lease renewed for an additional four year term.
6100 Condor Drive
Moorpark, CA

Landlord Services




Challenge:
6100 Condor Drive became vacant just as the industrial real estate market began to slow dramatically. The building is a 114,556 square foot R&D / industrial facility. Its heavy mezzanine and lab / office area, as well as a lack of clear warehouse space, created a challenging leasing assignment. In addition, this submarket had not seen a lease transaction of this size of building type in the previous three years.
Strategy:
TEAM DeGRINIS set out to capture the attention of all tenant requirements in the region, even if the building did not seem like a perfect fit. Through the team’s tenant prospecting process and broker outreach program, the team tracked down a tenant, represented by another broker, that was searching for 75,000 square feet of manufacturing / distribution space. By asking the right questions, the team was able to demonstrate that a portion of the tenant’s manufacturing operation could be conducted under the mezzanine. The team also advised the landlord to exclude approximately 10,000 square feet of the mezzanine that the tenant did not need.
Results:
The tenant, TestEquity, LLC, consolidated their four building operation into a 75,827 square foot space at 6100 Condor Drive. The tenant later stated that the creativity in which the landlord accommodated their needs was why they chose this building over three alternatives. Approximately one and a half years after lease execution, the competing buildings were still on the market at offering lease rates even lower than what was achieved on this transaction.
2260 Camino del Sol
Oxnard, CA

Tenant Services




Challenge:
Worldwide Plastics Company occupied three separate buildings totaling 22,000 square feet of industrial space for its warehousing and distribution of plastic containers. They had an immediate need for additional space; however, their current lease did not expire until the end of 2010, and they did not want to pay “double rent”. Additionally, the company desired an aggressive lease rate to take advantage of the current market conditions, but did not want to be locked into a long term lease in order to be flexible for future growth plans.
Strategy:
TEAM DeGRINIS met with Worldwide Plastics to analyze their short term and long term needs. The goal was to strike a lease commencement date at the beginning of Q4-2010, but postpone rent commencement until at least January 1, 2011.
Results:
The team located a 28,815 square foot state-of-the-art distribution facility, which was perfect for Worldwide Plastics. The team was able to negotiate a 38-month lease term that provided flexibility for long term growth plans, but was long enough to achieve an aggressive lease rate that was 25% below the landlord’s original offer. Furthermore, Worldwide Plastics was able to gain occupancy beginning October 1, 2010, three months prior to rent commencement, resulting in the tenant saving over $40,000 as they relocate to their new facility.