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Project Outline
GVA Kidder Mathews was retained by
Portfolio Financial Servicing Company (PFSC) in late 2004, just six
weeks prior to the expiration of its 25,000 square foot office lease.
PFSC needed to reduce its overall square footage and reduce its overall
rent exposure. Most importantly, it needed the flexibility to allow it
to complete ongoing merger discussions without having a lease obligation
that negatively affect the value and marketability of the Company.
Services Provided
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Real Estate Agency
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Tenant Representation
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Transaction Management
Result
Mark Fraser and Brandon O’Leary approached
the landlord with a clear understanding of PFSC’s business strategy as
well as the deteriorating market conditions for comparable office
space. PFSC needed a renewal agreement immediately, needed to reduce
rent and needed the flexibility to relocate without significant
financial constraints upon sale of the company. We compared the cost of
parking at Broadway Plaza with the metropolitan-area space alternatives
that provided free parking. By describing the current marketplace and
the leverage a large user has, we outlined the high cost to the Landlord
of losing PFSC as a tenant. Further, we were able to show that many, if
not most, renewing tenants in the market were receiving early
termination rights. Thus, PFSC was able to secure favorable early
termination rights in the event of a change in ownership and to renew
their lease prior to imposition of any holdover penalties. By securing
a waiver of parking rent for 18 months, we were able to reduce PFSC’s
occupancy cost by 40% initially and 25% over the term of the lease. To
the firm, this represented a savings in excess of $500,000 and the
flexibility to move forward with its merger plans.
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“Everyone wants to save money on
rent. What we needed, in addition to that, was the ability to grow
or shrink, to extend or terminate our lease in the likely event of a
change of ownership. Mark and Brandon took on that job, accomplished
it in less than 45 days and got us free parking downtown, too! Our
company is more valuable because of their work. ”
Jerry Hudspeth
President/CEO |
