Client: Oilfield Services Provider
Location: Calgary, AB
Asset: Office Portfolio
Result: $12 million in rent saved over 10 years
Portfolio Analysis
Consolidation of Building Units Saves $12 Million in Rent
Problem:
The oilfield services segment of a client had grown rapidly, taking space wherever available in a tight Canadian market. The company occupied three floors in one downtown office tower, and subleased or directly leased additional properties throughout the city. When a principal lease came up for renewal negotiations, the company was unsure of the best course of action.
Solution:
CPL's research led to us to recommend co-location for all but one of the existing business units; a single, well-located building would provide opportunity to enhance corporate image and instigate shared services, functional staffing, acquisition integration and other cost efficiencies. Working with local brokers and a space planner, our team evaluated some 20 potential target sites. We located a single 7-story building that fit the client's needs and found a strong local developer to buy the property from its offshore owners.
Outcome:
The team was able to negotiate a lease and tenant improvement agreement that met all of the client's requirements and saved $12 million in rent over the next 10 years. Operational efficiencies and a reduced rent at this new location also provided for business growth and improved customer service. The remaining R&D and service facility was moved into a new build-to-suit facility at a targeted location.