BKD was in a below market sublease agreement that had just over two (2) years of remaining lease term. The rental market for Class “A” office space was very tight in Oklahoma City and with a very strong local economy, rental rates were rising rapidly. BKD was in need of expansion space but encumbered by the existing sublease agreement.
CRA evaluated all options available to BKD in the marketplace and gained a clear understanding of the current and projected market conditions. CRA then negotiated terms with the building owner whereby the existing sublease was terminated with BKD retaining the low rental rate structure of the sublease for the first two (2) years of the new lease term.
In a rapidly improving market, BKD tied down a very low rental rate for a long-term lease a full two (2) years in advance of the sublease expiration date. By terminating the sublease agreement and entering into a direct lease agreement with the Building owner, BKD: 1) mitigated its lease risk; 2) expanded into contiguous space on the floor; and 3) secured a tenant improvement allowance more than adequate to cover all improvement costs.