Sanpaolo IMI Bank
Sanpaolo IMI Bank (SIB), a Turin Italy-based bank, was considering either a lease renewal or a relocation of its New York branch. SIB, along with a sister entity, Banca IMI Securities (BIS), shared a floor at prestigious 245 Park Avenue. SIB and BIS jointly interviewed more than a dozen real estate firms before awarding the assignment to Studley (now Savills Studley), almost three years prior to their respective lease expirations.
SIB was concerned that in an environment of low vacancy for class-A office space, and with very little new construction, the bank could be faced with dramatic rent increases if it waited until the end of its current lease to make a new commitment. SIB wanted to avoid market risk, but not at the price of an above-market rent. At the same time, SIB needed to accommodate its and BIS’ evolving technological needs (i.e., power, HVAC etc.).
Studley lead a site-selection process that involved a thorough examination of class-A properties in both Midtown and Downtown Manhattan. Studley created leverage in its renewal negotiations with the landlord of 245 Park Avenue by focusing on existing spaces, as well as buildings that would be able to deliver future possession of space to coincide with SIB's lease expiration. Studley utilized this information, along with a thorough knowledge of recent leasing developments within 245 Park Avenue, during its lengthy negotiations with SIB's present landlord. Throughout this process Studley provided SIB with detailed financial analysis factoring in the required construction costs if the bank were to either remain at 245 Park Avenue or relocate to a new location where it would need to design and build a new facility.
Studley secured a favorable lease renewal for SIB by creating viable relocation alternatives well in advance of SIB’s lease expiration. Studley also furthered SIB's position by making its current landlord aware of the significant costs that the landlord would incur if SIB were to move from the building, compounded by the fact that the floor in its current configuration and build-out would have no residual value to any tenant that the landlord might seek to replace SIB.
In the end, Studley agreed to terms with the landlord almost two years in advance of SIB's lease expiration, while convincing the landlord to agree to today's rents coupled with escalation base years of two years hence. Studley, in addition to negotiating for a landlord work allowance for SIB to upgrade its space, also negotiated for favorable base building infrastructure protections.
245 Park Avenue,
New York, NY