THQ Inc., a leading video game development company retained Studley (now Savills Studley) to analyze its corporate headquarters needs in Calabasas, California. After piecing together expansion space in its current building over the years, THQ wanted a better corporate image with greater space efficiency. The initial search included identifying large blocks of space as well as build-to-suit opportunities. THQ anticipated future headcount growth as a result of exploding revenues and new business units; however, it was not clear whether that growth could occur in THQ’s existing location.
One of the many goals specified by THQ’s senior management was to create leverage with its existing landlord while aggressively pursuing other opportunities in close proximity to the current headquarters location in Calabasas. With limited availability in the marketplace and build-to-suit timing too far out, the current landlord was pushing for an above-market rental rate to remain in the building.
Studley identified an existing flex building within 3 miles of THQ’s current location. Although the building was in escrow with a new owner/user, Studley demonstrated to the landlord that the benefits of signing a long-term lease with THQ were greater than to selling the building. After the landlord pulled out of escrow, Studley negotiated an aggressive market transaction that included a significant improvement allowance and the landlord’s commitment to complete extensive exterior improvements to the building, thus creating an impressive new corporate identity, including freeway signage.
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