Adprime Media was located in space at 22 Cortlandt Street, New York, under a sublease arrangement that did not include any options for expansion. Adprime was experiencing rapid growth of its internet advertising business and had an immediate requirement for additional space. The instructions to principals of InterRelate Group were to find space in the downtown financial district with existing infrastructure and furniture systems in place, at a very cost effective rental rate. The occupancy date was immediate.
Course of Action
We conducted a thorough search of the downtown market focusing on sublease opportunities. One alternative was a three-floor sublease opportunity at 33 Whitehall Street, formerly known as the Broad Financial Center. The building had been constructed in the 1980’s by British developer, Howard Ronson, and was equipped with above-standard mechanical and electrical capacities. The 7th through 9th floors were occupied by a large financial services firm that had been acquired by a midtown based firm and the space was no longer needed. Because of the extensive data center and network interconnecting the floors, separating two of the floors proved to be difficult.
Our team negotiated a transaction covering all three floors at a sharply reduced overall rental rate after we convinced the sub lessor to accept our assertion that the separation costs, as well as the market driven unlikelihood that another user would emerge who was willing to commit to all three floors, made our proposal attractive.
Adprime was able to secure fully furnished office space, including a state-of-the-art data center, that not only fulfilled the immediate requirement, but that also provides space for expected future expansion. The transaction structure achieved rental rates that are at least 30% below current market valuation for the building.