Region: Minneapolis
Services Provided: Tenant Representation, Financial Analysis, Lease Negotiation, Workplace Strategies, Project Management
Size: 26,289 SF and 13,049 SF
CHALLENGE
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In early 2020, as the COVID-19 pandemic forced many employees out of their offices and into remote work. The team reached out to Augsburg Fortress (f.k.a. 1517 Media) regarding their office space needs.
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After much discussion and analysis of employee and business needs, Augsburg Fortress decided going forward they could reduce their office space footprint by 50%.
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Although five years remained on their current lease, the team had previously negotiated an early termination option into the Augsburg Fortress lease at 510 Marquette in 2015 allowing them to exit their lease early for a fee.
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Jim realized the termination fee would be an issue so he would address that with any future landlord.
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SOLUTION
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The team searched the market for a property where Augsburg Fortress could reduce its space by 50%, occupy a full floor, and have exterior signage. 411 Washington, located in the North Loop of the Minneapolis CBD, was able to accommodate these key features.
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The new building has a superior location and improved building and area amenities compared to 510 Marquette. In addition, Jim’s negotiation skills resulted in a lease agreement that provided the company with better economic terms and turnkey office space built by the landlord to meet 1517 Media’s unique space needs. The new landlord agreed to pay 1517 Media’s termination fee at 510 Marquette as well as all move-related costs.
RESULTS
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With no out-of-pocket costs, 1517 Media reduced their occupancy square footage by over 50% and monthly costs by over 60%.
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The new landlord paid their termination fee and completed a turnkey buildout of their new space, Augsburg Fortress' potential savings will be over $2 million in the next 4.5 years and much more moving forward.
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The new lease has a termination right so Augsburg Fortress will be able to adjust to any change in their future needs.