Property Stabilization

Challenge

The tenant occupying the property needed only half of the building and asked us to sublease approximately 28,192 SF of excess space. We had leased portions of the building on their behalf in the past; this time, they wanted the entire half of the building placed on the market at once. The space lacked basic tenant improvements, offering only a bank of restrooms and no traditional office buildout, which narrowed the field of prospects considerably.

Action

We marketed the property for several months before learning of a requirement in the market: a local Poway company had been precleared on a new contract and needed expansion space for manufacturing. We contacted the tenant’s broker, a relationship we have held for many years, and presented the availability directly. We encouraged the prospect to tour the vacancy and evaluate it as a manufacturing solution, given the significant power already in the premises and our willingness to structure a transaction of approximately 28 months.

Results

We resolved the situation for the building’s occupant by convincing the landlord to execute a direct lease with the new tenant, relieving the existing tenant of any ongoing sublease liability. Beyond the subject premises, we assisted the landlord in extending the original tenant’s lease to a new 10 year term. The result stabilized the building well into the future while meeting the needs of both the existing tenant and the incoming tenant, who is likely to remain in the building well beyond the initial 28 months.