Lease Restructure & Extension: Orthopedics Group

Summary

An Orthopedics Group leveraged Crown Tenant Advisors’ services for a Lease Restructure & Extension which led to a total benefit of over $114,000.

Challenge

  • Established multi-facility Orthopedics group practice located in a medical office building in a soft submarket.
  • The practice had been a tenant in the building for over twenty years.
  • Identify whether relocating within the submarket or renegotiating the existing lease and updating the current space would be the best course of action for the practice.
  • Mitigate out-of-pocket expenses for the practice.

Solution

  • Toured available options in the submarket to narrow down the prospective properties and leverage the existing market.
  • Engaged the existing ownership with proposal to extend the lease under improved economic terms.
  • Negotiated several scenarios for the future of the practice.
  • Used leverage created by considering alternative locations to receive an aggressive new Rental Rate, a Tenant Improvement Alliance and Free Rent in the beginning of the new lease term.
  • Aligned the goals and future plans of the practice with their real estate to create a competitive advantage.

Benefits

  • Reduction of over $4.65/SF off their current Rental Rate over the term. Equated to a total savings of over $62,000.
  • 5 months of Free Rent to be used at the beginning of the new lease term equaling $20,317.
  • $32,000 of Tenant Improvement Allowance to be used by the group to update the current space.
  • Avoided future expenses by locking into a Rental Rate determined by a Tenant’s real estate market.