Breaking up the whole into the right pieces, with the right marketing, could rescue a non-profit’s precious resources from a big loss.
Client: Fred Hutch
Size: 6,000 - 106,000 SF
Space Type: Lab/Clinical
Service Line: Brokerage, Consulting & Strategic Planning
Keywords: Healthcare, Life Science
Total Client Transactions: 4
The not-for-profit needed to move out of a large amount of mixed lab and office space across multiple floors with only two years remaining on an above-market lease. In addition, the building was marketing competing available space, and the life sciences market offered very few prospective tenants. Not surprisingly, the landlord was completely uninterested in negotiating a lease termination.
With little chance of subleasing the full space, Kinzer went to work on a host of creative options. Kinzer concluded that by extending the lease on the more valuable and marketable 40,000 SF of lab space, a deal could be reached with the landlord to terminate the less desirable 60,000 SF of office space.
To dispose of the remaining lab space, Kinzer conducted a thorough analysis of the life sciences market and created an aggressive sublease marketing plan, which was successful in generating two subleases with minimal downtime. An additional prospective subtenant resulted in a termination of a portion of the premises. Through creative negotiations with the landlord, Kinzer was also able to complete the sublease agreements without covering tenant improvement costs.
Given the importance of devoting every possible dollar to its important mission, Fred Hutch needed to recover as much as possible from their above-market lease. Kinzer beat even best case projections, recovering nearly 70% of the obligation, including one termination and two subleases, at a time when only one other small lease for lab space was executed in the Seattle market.