Navigating Complex Lease Obligations: Vestian's Strategic Solution for NYC Media Firm
Introduction
A New York City-based advertising and media company had outgrown their 5,000 square foot full-floor space while still having four and a half years remaining on their lease. They engaged Vestian to secure a larger space in a higher-quality building and resolve their existing lease obligation.
Challenge
The client faced multiple challenges: outgrowing their current 5,000 square foot space, limited expansion options in their existing building, minimal landlord construction contribution for buildouts, and 4.5 years remaining on their current lease. They needed a solution that would address their space requirements without incurring significant financial risk.
Solution
Vestian developed a comprehensive strategy to meet the client's needs. We secured a 15,000 square foot space in a higher-quality building, tripling the client's footprint while negotiating a 33% base rental rate reduction.
We arranged for the new landlord to provide a turnkey, high-end buildout with above-standard electric capacity. To address the existing lease obligation, we structured a deal with the new landlord to take over the client's current lease, eliminating the risk of double rent payments.
We negotiated terms to amortize some of the existing lease expense into the new deal, with provisions for discounts once a new tenant was secured for the old space. This approach allowed the client to upgrade their space while maintaining their preferred submarket location and eliminating potential financial risks of up to $1.5 million.
Our solution effectively addressed the client's space needs, improved their real estate position, and mitigated financial risks associated with their previous lease obligation.
