Office Lease Case Study – Plano, TX

Background: Our client bought the rights to a fitness franchise and wanted to open their first location in the Plano, Frisco, or McKinney areas. The challenge was to determine which location made the most sense considering the options in the market and how could we meet our client’s timeline of being open and operational in time to capture the New Year’s resolution crowd for their business.

Results: After combing through about two dozen potential locations, we narrowed our scope to our top 3 properties based upon location, size, potential scope of build out involved and willingness of the landlord to work with a new franchisee.

  • 2,328 rentable square feet
  • Negotiated base year rent $21.50 (versus $22.00 asking, a savings of $5,820 over the lease term)
  • Negotiated 2.5% annual rent increases (versus market of 3%, a savings equal to $2,654)
  • $8.39 NNN with negotiated 5% annual increase cap
  • Negotiated four months of free rent (an amount equal to $16,684)
  • Negotiated landlord to build out the space with the exception of painting (a savings estimated at $35/SF or about $81,480)
  • Landlord will provide a new 10-ton HVAC, equivalent to one ton per 233 SF versus original proposal of one ton per 300 SF

Total value added – $106,638*+

*Amount estimated based upon construction costs of similar spaces