Location, Location, Location
The most well known adage in real estate is “location, location, location”. To a retail site selection person the right location for a store makes for success. Investment property owners know that with a properly located building, they will always see demand, and thereby appreciation in their asset. But ask a corporate real estate executive what this saying means to them, and it’s about finding a location where the tenancy lasts successfully for a long time.
We recently met with two long time clients that we had served as tenant reps for almost 15 years. Over that time in the middle of their leases we renegotiated their rents downward and we renewed their leases in advance of their lease termination dates. By touring the market and leveraging the renewal negotiations with viable relocation options, our clients spoke of how important it was to find the right location back 15 years ago.
Finding the right location to match our client’s needs is hugely important. When it really pays off is on those anniversary dates of the lease where our clients aren’t spending capital to relocate and build out new space.
As a case study, we often refer to our 42,585rsf tenant representation assignment in 1990 for Pacific Bell Directory in San Jose. We exclusively represented PBD, an AT&T subsidiary, on all their US office transactions. Our assignment in San Jose was to create a location that crafted an identity for the local Directory office. We negotiated fiercely with the City to get adequate signage. And Directory put that on 100 Park Center Plaza, the home of their South Bay operation.
Our original focus on finding a great situation for our client paid off for them for 20 years. The business changed significantly as you can imagine over the years. But the space and tenant identity continued to work. Once their parent company AT&T terminated operations, it coincided with the end of an extended lease term.
TMC today continues to focus on spaces that will last a long time for our clients. It saves them capital, creates a long term identity, and limits downtime due to relocating. And that’s a big reason that “location, location, location” is so important for our clients.