Archstone is a recognized leader in apartment investment and operations. With a total market capitalization of approximately $12 billion, Archstone owns and operates an irreplaceable portfolio of high-rise and garden apartment communities concentrated in many of the most desirable neighborhoods in the greater Washington,D.C. metropolitan area, Southern California, the San Francisco Bay area, Chicago, Boston, Southeast Florida,Seattle, and the greater New York City metropolitan area.
Archstone had approximately four years left on a back-end loaded, above-market lease. To accommodate its growth, Archstone needed to increase its space requirement by approximately 15%. The fact that Archstone had a deteriorating relationship with its landlord’s asset manager and found the property management group to be sub-par, added to the complexity of the situation.
Studley (now Savills Studley) approached Archstone’s CEO and suggested putting together a long-term real estate plan that included restructuring the existing lease obligation and expansion, including completing both a long-term growth plan and an exit strategy. Archstone terminated its relationship with its then real estate service provider and hired Studley to put together and implement a long-term strategic real estate plan.
Following the successful creation of a long-term real estate/strategic business plan, Studley was able to restructure Archstone’s lease by adding an additional five years to the term, lowering the base rent and expanding by approximately 23,000 square feet and creating an exit strategy should Archstone outgrow the building. The end result for Archstone was a savings of $1.2 million over the first three years of its new lease,a significant tenant concession package which included substantial tenant improvement dollars for both its expansion - as well as its existing space - and the creation of tremendous long-term flexibility for Archstone within the building.
Panorama Corporate Center IV,
Lease Expansion, Lease Restructure