In mid-2011, Carlson Commercial was retained by a prominent Twin Cities e-commerce company to assist with a renewal/restructure of their HQ/distribution center lease (423,000 sf) and expand a nearby distribution center (173,000 sf). Our client had grown significantly during the 20+ years of occupancy in the HQ building. The HQ lease required the Tenant to spend significant money on building maintenance items that were typically Landlord costs. In 2003, expansion necessitated a second distribution center (West). Carlson Commercial was tasked with qualifying and reducing the Tenant cap ex. costs, reducing the rental rate, and expanding the West distribution center. Our challenge was to hit the savings goals while negotiating with two different Landlords and two different lease expiration dates. Our objective was compounded by a company sale that occurred at the height of our negotiations.
Carlson Commercial worked with the executive team to navigate both company Buyer and Seller expectations. In 2013, we achieved a $2.1 million aggregate reduction in occupancy cost over 60 months. We matched the lease expiration date for each facility to create future real estate flexibility.
For more detailed information on the strategy and techniques used to accomplish our objectives, please contact us at www.carlson-commercial.com.