...Prior to making the decision to become an owner (of their corporate real estate) rather than a tenant, the Bar conducted exhaustive studies that compared the costs of buying versus renting. Working closely with commercial real estate services firm Savills Studley, it was determined that buying a building would save the Bar a minimum of $25 million over 30 years. During that time, the Bar also will build equity through ownership, which the organization will be able to leverage in the coming years—an advantage unavailable to the Bar if it continued to lease office space.
"We ran an extensive financial analysis and went through many models looking at the benefits and value to the Bar of owning and how much [it] could save over a 30-year period," says Nicole Miller, senior managing director at Savills Studley. "We went out into the marketplace to examine what was out there and what best fit the criteria and goals the Bar established upfront."
"The Bar chose to invest in its future," says Demetri Koutrouvelis, senior managing director at Savills Studley. "Instead of paying leasing costs, the Bar has an ownership opportunity that translates into considerable savings."
Scott M. Johnston, principal at the D.C. office of the commercial real estate advisory firm Newmark Grubb Knight Frank, which acted as an independent third party evaluating Savills Studley's research, agrees with the Bar's decision to buy. "The market in D.C. is slowly becoming a more balanced market in renters versus buyers. The D.C. Bar acted at the right time to purchase its building, and Savills Studley did a great job with its analysis."
An Exhaustive Search
Based on the Bar's criteria, Savills Studley identified a wide array of properties that could meet the Bar's needs. Nearly 40 different properties were considered, including existing buildings, vacant sites, and redevelopment projects...Our New Home: Investing in the Future
Related StoriesSavills World Office Yield Spectrum 1H/2016
National Office Sector Report (Q4 2015)