$1 Goes a Long a Way in Unique Office Relocation

Urban Outfitters, a fast growing retailer and wholesaler specializing in innovative apparel and furniture fashions, was starting to burst at the seams. Literally.

Headquartered in Philadelphia, the company had eventually spread its employees and departments throughout five different office buildings in several high-rent districts For a company powered by off-the-wall inspiration and team synergy, their office situation was no longer conducive to their proven business processes.

After several failed attempts to locate suitable space to accommodate the unique workspace environment needs of his employees, CEO at the time, Dick Hayne, realized his search required a fresh approach. He found it in a desolate military compound.

The company arranged a deal with a very eager economic development group to absorb close to 300,000 square feet within the empty Philadelphia Navy Yard for the bargain price of just $1 dollar. That dollar also bought the company the right to undergo a major remediation project to remove excessive mold and asbestos. They also had to find a way to recycle rusted facility equipment into usable office infrastructure. In the end, the company invested $112,000 million. It was granted a little over $19 million in tax credits and relieved of its sales tax burden until 2018, to which company officials attach a $215 million value.

By capitalizing on local incentives and the opportunity to re-fuel a facility with little life left, Urban Outfitters created a vibrant workspace like few others in the country. The refurbished equipment, kitschy floor plans and urban decay appeal now serve only to enhance the company's image, demonstrating literally how a company's office environment can bolster its brand.

The Urban Outfitter relocation is now a timeless commercial real estate case study. With the discipline to steer away from quotidian office alternatives, one would find that more opportunities like the one seized by this growing apparel company do exist. It simply takes a different train of thought. Remember that your office space should fit the company not just physically but in those hard to measure, intangible ways as well.

Clearly, a relocation of this magnitude isn't feasible for most companies. However, simply matching the creativity and employee-driven approach that Urban Outfitters used to secure their new headquarters should be a goal for every company.

Lease Renewals Take Work, Too

Finalizing terms on a new lease for office space requires strategy, a good deal of corporate energy and of course, professional advisement. However, many tenants fail to realize that the lease renewal process demands a substantial amount of planning and advisement as well.

When searching for a new location, a company typically takes into account basic market and building data like cost per square foot, core factor, vacancy rates, concessions and amenities. Once settled in and productive, it's easy to forget about the ongoing dynamics of the current real estate market. After all, you have a business to run. Remember though, your landlord is never out of the real estate loop.

Every day, commercial landlords are making decisions about the space and buildings around you that will have an impact on your renewal. This is why it's critical for companies to understand that the same hard data and subjective characteristics used to secure their location initially are just as important in the renewal discussion.

Since landlords are keenly aware of the available vacancies (their competition) in the market, it will benefit you immensely to know what other space options can be a good fit for your company. Even if you know you do not want to relocate, arrange visits to possible locations. Discuss terms and potential new space plans. You don't have to get overly granular in your due diligence but work closely enough with your tenant rep to craft a viable relocation alternative to a potentially unfavorable renewal. It can be a critical tool in negotiations with your landlord.

Once armed with a fresh understanding of the market and with a knowledgeable tenant representative by your side, you'll be able to approach your current landlord with a sensible and professional renewal proposal that is in line with current market conditions.

Green is Growing

Going green is no longer trendy. It's a mandate. Whether the global warming debate is important to you or not, the fact remains environmental conservation should be a top-of-mind priority for all of us. At the very least, the green movement has brought awareness to how critical our impact is on the natural world. It doesn't matter if the causes are man-made; it only matters how man contributes to the solution.

In the real estate world, 2009 is the year that the green building boom is supposed to finally be felt, according to a recent McGraw-Hill Construction report. This impending building era will mark the first time a user of corporate office space will have options when looking to secure a location in a green building, as the survey predicts that sustainable buildings will comprise 16 percent of large companies' office portfolios.

Obviously then, the momentum for sustainable construction is starting to build. Fertilizing the growth is Global Green USA, a company founded in 1993 that is focused on reducing global warming and promoting green architecture. In a recent interview with Multifamilybiz.com, Global Green CEO Matt Peterson was encouraged by developers' efforts.

"I think green building is proving out," Peterson said, predicting "we're at the beginning of a huge upswing in adoption of green building standards." Peterson believes that LEED (Leadership in Energy and Environmental Design) certification is a great help to the cause but still needs to be monitored to ensure its standards are being met. "Even building LEED silver buildings everywhere isn't going to solve the climate crisis … But it's a big contribution to it."

Energy costs are a building's most controllable, so green construction expects to provide landlords considerable savings, namely: an 8 to 9 percent decrease in operating costs; 7.5 percent increase in building values; 6.6 percent ROI improvement and; a 3.5 percent occupancy increase. However, the new construction standards will also cost tenants, as rent in sustainable office space is expected to be about 3 percent higher than in traditional space.

The green movement is no longer restricted to environmental protests and university studies. Instead, it's become a vital component of future business strategies. If the steps we're seeing by developers and large corporations continue to lead in the right direction, it should be safe to assume that the future will look, well, green.

The Miller Richmond Company Represents 68,000 Square Feet of Tenants at Center Pointe

The Miller Richmond Company is pleased to announce that it has successfully negotiated 68,000 square feet of leases for three tenants at Center Pointe, a 355,000 square foot Class A office project located at 1100 Johnson Ferry Road in Sandy Springs. The three Miller Richmond clients include Reproductive Biology Associates (for 25,000 square feet), Georgia Cancer Specialists (for 24,300 square feet) and Obstetrics & Gynecology of Atlanta (for 18,700 square feet).

Each of these clients executed its lease in conjunction with the recently announced re-development of Center Pointe by Duke Realty Corporation's healthcare real estate division, BremnerDuke. In June of this year, BremnerDuke acquired the two-building complex located adjacent to Saint Joseph's Hospital and across the street from Northside Hospital and Children's Healthcare of Atlanta at Scottish Rite. Given this location, Duke acquired the project with the intent of converting it into a medical office facility.

According to David Rubenstein, Principal with the Miller Richmond Company, "BremnerDuke's track record for medical development and its financial commitment to converting the project were key factors for the practices we represented. Each was facing a number of physical challenges in their current space ranging from design inefficiency and lack of building amenities to limited adjacent parking and patient inaccessibility. Center Pointe offered them the chance to secure highly functional clinical space in a newly renovated building with excellent parking and access well into the future. Additionally, given the current scarcity of large blocks of space in the (Pill Hill) area, we believed Center Pointe represented an ideal relocation opportunity."

The first of these three tenants will move into the project first quarter of 2008.