Alliance Wood Group Engineering, L.P.
Alliance Wood Group Engineering, L.P., one of the nation’s top oil and gas engineering firms, had experienced rapid growth and needed to expand its office presence in Houston. . The firm was leasing more than 150,000 square feet of space in three separate locations, two of which had significant lease term remaining. Based on the Studley (now Savills Studley) team’s six years of successful representation on behalf of Alliance, the firm retained Studley to develop an expansion strategy.
After conducting a comprehensive study of Alliance’s business strategy, Studley created a set of potential options that would support the firm’s goals. These options included consolidating immediately into one building, reconfiguring the existing space or postponing consolidation until 2010 upon lease expiration.
Following a full exploration of these options, Studley advised Alliance to consolidate immediately into one location by securing a long-term lease in a high-quality building that generated more than $2 million in occupancy cost savings. Since the new lease was structured with one of Alliance’s existing landlords, the firm received a lease termination forgiveness of more than $3 million dollars in existing rental obligations. In addition, through the inherent increased efficiency generated by an office consolidation, Alliance saved an additional $3 million in operating expense savings, including the elimination of IT redundancy. A second location was assigned to two separate tenants resulting in forgiveness of an additional $4.3 million in future obligations at a cost of less than $100,000.
The new lease also provided Alliance the opportunity to expand its premises into a second building. Prior to occupancy at Parkview One, Alliance excerised options to take down a floor in Parkview 2 at fixed terms. The overall consolidation allowed Alliance to reduce its leased space by 26% and subsequently grow to 135,000 square feet while also creating a more productive and culturally-appropriate workplace, enabling recruiting efforts and increasing retention of high-level engineering talent.
Consolidation, New Lease