Snell & Wilmer L.L.P.

Client Situation

Studley (now Savills Studley) was retained to assist Snell & Wilmer L.L.P. (S&W) with its rapidly growing Denver office.  The landlord, Equity Office Properties Trust (EOP), was unwilling to provide long-term solutions to accommodate the firm’s growth since the building was nearly fully occupied and the average market rental rate was rising.

Consideration Analysis

Because Snell & Wilmer is a well-renowned and credit-worthy tenant, Studley was able to create a competitive bidding situation among several landlords that would satisfy the company’s requirements.  The options included two build-to-suits and two existing properties.  Because the firm’s current landlord became concerned that it would lose a well-renowned tenant, it responded to Snell & Wilmer’s requests and a lease restructure and extension was put into place.

Result

The amended lease provided S&W with enhanced expansion rights to accommodate its projected growth in Denver for the next ten years.  Because the building has always maintained very high levels of occupancy, it was necessary to secure expansion rights from other tenants in the building.  As protection against increases in rental rates, all expansion space may be leased by the firm at the same rate as the original space and with an above-standard improvement allowance provided by the landlord.  Additionally, as protection against carrying the economic burden of vacant space, Studley secured a continuous right to relinquish space.

The improvement allowance negotiated for the firm’s current and expansion premises is higher than the amount normally provided for first generation space.  Any funds not spent by the law firm on improvements will be amortized with interest as a credit against future installments of rent.

S&W did not post a security deposit, letter of credit, personal guarantees, or any other credit enhancements and is not required to show the landlord financial information in the future, although the landlord is obligated to provide significant improvement allowances.

Summary Information

  • Property: Tabor Center, Denver, CO
  • Transaction Size: 40,284 SF
  • Transaction Type: Lease Expansion, Lease Restructure
  • Service Line: Law Firm Practice Group