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80,000 Square Foot Lease Restructure Case Study



The local Industrial Market had softened dramatically and there was a significant change in the client’s needs.  Jim convinced the landlord that it would be better to agree to a substantial reduction in the current rent and extend the lease, rather than have an empty specialized building if the market did not improve. The outcome was a “win-win” transaction.

80000 SF Lease Restructure_JimPratt


80,000 SF

Services Provided

Lease Restructure
Lease Analysis
Tenant Representation


A large international industrial company had three and one-half years remaining on a fifteen-year lease for an 80,000-square-foot, single-tenant office/manufacturing/distribution facility. Over time, their needs had changed – not only did they not need as much space, but the layout was no longer ideal.


The original build-to-suit lease had rental bumps and, coupled with the economic recession and declines in the Florida commercial real estate market at the time, the tenant was paying well above current market rents. Because of the remaining lease obligation, the only option was to attempt to restructure the lease.


Having previously worked with the executive team for the North American subsidiary on several assignments, Jim Pratt was asked to represent the firm in attempting to restructure the lease to significantly reduce the firm’s costs. Partnering with the local Colliers’ team, detailed comparables were generated for similar requirements prior to conversations being initiated with the landlord/owner, a private investor from Germany.

To achieve success, it was critical to establish rapport, but also establish that any continuing occupancy at the expiration of the lease was contingent upon the lease being restructured now.


Jim quickly gained the confidence of the landlord, enabling negotiations to proceed on a positive note. Detailed analytical tools were used to determine the terms to be offered and the net reduction in rent, and to structure a sliding scale compensation plan that aligned achievement of the tenant’s financial objectives with the fees earned. These tools enabled the tenant to compare the net savings of counter offers and revised offers. By agreeing to a five-year extension (which also had fixed rates in the existing lease), the net savings achieved by the tenant over the restructured lease term exceeded the $1.3 million and represented a 17.5% reduction, compared to the 20.4% reduction in the original proposal made on behalf of the tenant.

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Jim Pratt



Jim Pratt has more than 35 years’ experience in commercial real estate.  Prior to joining Colliers in 2009, he was a Principal with NAI Houston. In addition to representing tenants, buyers and sellers of real estate, Jim has represented many institutional and private owners in the leasing of office and industrial properties and has developed an in-depth understanding of the dynamics involved and what makes a deal work for both tenants and landlords.  He is known for his significant creativity in the structuring of unique solutions for complex assignments, resulting in “win-win” transactions.  His analytical skills and his ability to communicate the pertinent facts throughout the negotiation process have produced significant results.

Jim has represented tenants and owners ranging from local entrepreneurs to large corporations in transactions in Houston and throughout North America, completing more than 100 assignments outside of Texas.  He has handled all types of industrial and land  requirements in addition to offices leases, and the acquisition and disposition of all types of real estate. In the last economic downturn, Jim helped structure sale/leasebacks providing significant liquidity for one of his clients.  Jim is currently assisting clients with the evaluation and implementation of this same strategy, as well as lease restructuring where applicable.

Prior to entering commercial real estate in 1985, Jim served as a project manager on several multi-million dollar commercial construction projects for W.S. Bellows Construction Corporation.  His educational background in architecture has also proven invaluable in assisting landlords and tenants in the evaluation process involved in site selection.

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