Amadeus’ 185,000-square-foot lease was expiring on its North American headquarters. Given the lack of large blocks of space available in Miami, it was necessary to start a search for potential build-to-suit sites three years prior to the lease expiration. Amadeus required less space than it currently occupied and was reluctant to commit to a lease term of more than five years. The firm’s existing building also needed significant renovations to its mechanical systems and elevator.
After studying Amadeus’ employee commute patterns and drive-time analyses, Studley (now Savills Studley) conducted a search for potential existing and to-be-built buildings. After receiving proposals from numerous landlords, Studley approached Amadeus’ current landlord with a proposal to extend its lease and to implement renovations that the building required.
After extensive negotiations with Amadeus’ existing landlord and while maintaining ongoing discussions with the developer of an alternate prime build-to-suit site, Studley negotiated the following with the existing landlord:
- A 10-year term with an option to terminate after the fifth year.
- A seven-figure remodeling allowance to cover all of Amadeus’ remodeling needs.
- A commitment from the landlord to provide a new elevator system and to update the HVAC system.
- An obligation to rectify the under-parked condition of the building by adding or leasing spots to meet the required parking ratio of four parking spaces per 1,000 square feet.
- An option to contract by giving back up to 32,000 square feet at a later date.
While there is no cost to Amadeus to contract, the firm did receive one year’s free gross rent if it does not give back the 32,000 square feet. Amadeus lowered its base rent by 13 percent and saved an additional $318,000 by starting the new lease terms prior to the existing expiration date. Additionally, Amadeus received all of the necessary building and remodeling improvements at no cost and obtained locked-in rental rates for 10 years, while maintaining the flexibility to vacate the building in five years.
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