We were familiar with the Executive Partners at Lommen [as our own clients used their business and real estate attorneys from time to time]. We knew that their office lease was expiring in 12 months, and that they had been [unsuccessfully] trying to negotiate a long-term lease renewal with their Landlord. We encouraged the Partners to hire us in order to amplify the discussions with the IDS landlord and others. After speaking with our mutual clients and confirming our history of success on behalf of our Tenant-clients, Corporate Tenant Advisors was engaged to represent the Partners at Lommen Abdo with its office space solutions and negotiations.
The Process and Tactics:
The initial meeting with the decision-makers at Lommen revealed their desire to remain in Downtown Minneapolis. We knew that we wanted to have at least 9 months to identify available vacancies, tour competitive options, negotiate the lease terms, and construct its long-term solution for its office space. CTA identified ten acceptable downtown alternatives, toured six of them, and requested Proposals from all six. Simultaneously, we engaged the IDS Center Landlord in negotiations in order to discover the best possible renewal terms in the event we decided to stay in the building. After the selected properties were further vetted, Lommen determined that Class A properties were better solutions than value-oriented Class B buildings. We identified two alternatives that met Lommen's goals. Knowing that the Landlords will likely learn of each other, CTA proactively created a competitive lease environment and began negotiating diligently with all three Landlords; both downtown relocation alternatives (creating necessary leverage between them), and the IDS Center Landlord (creating the illusion of a possible lease renewal in the minds of the two other downtown Landlords).
The Results: We successfully negotiated with the three Landlords, and in a very short period of time. By keeping all three fully engaged, we were successful in achieving reductions in all three offers. One property really stood out...International Centre at 920 Second Avenue South...we awarded the contract to them. With six months remaining on the IDS Center lease term, we had plenty of time to finalize the lease language, complete architectural drawings, and construct the premises. We negotiated lease terms that were a 25% discount from the Landlord’s original offer, which includes free rent and other concessions. Additionally, Lommen increased its square footage by 10% over IDS Center, yet saved 20% on its overall rent structure. This transaction was a huge success. The Partners at Lommen Abdo call us “Rock Stars”…we like to call ourselves “The Tenant’s Edge”.
Lommen Abdo is a respected Law Firm with a 70-year history in downtown Minneapolis, with offices located in the iconic IDS Center since 1988. While the location, amenities, and office space were outstanding, the annual rent expense had become unreasonably high. The firm needed to restructure its lease, or relocate to another downtown Minneapolis location.
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