Client Served
challenge
A national third-party logistics client (3PL) engaged CRA to ensure that their existing warehouse footprint in Ohio remained their best economic solution (occupancy and transportation costs focused) to continue serving this distribution network for multiple clients. The rental rates in the Ohio market for this warehouse location have been steadily increasing and the vacancy rate was less than 3%, minimizing occupancy costs was the focus.
Solution
As a single source solution to our clients, CRA identified all subleases and direct lease space in the marketplace and worked with our client’s transportation and sales teams to evaluate the best sites to occupancy and transportation cost should a lease renewal not be the best solution. CRA evaluated all sublease and direct lease opportunities within a 25-mile radius of the existing warehouse. CRA then produced a financial analysis across all the sublease and direct-lease options available in the market compared to renewing the existing lease, while considering relocation costs and any additional product transportation costs. Through CRA’s efforts, our client was able to secure a long-term, below market, lease renewal on its existing building.
Benefit
CRA’s procurement process led to a solution that allowed the client to minimize occupancy and customer service costs by securing a below-market base rental rate — thereby increasing the client’s competitive advantage in the market for 3PL providers. The ability to simultaneously leverage sublease and direct-lease real estate options in the marketplace provided our client the leverage needed to secure a below market rental rate, leading to reduced occupancy costs, generating an immediate competitive advantage over other 3PL providers in the market when providing service agreement pricing for existing and future projects.