LabCorp - Lease extension, Westborough, Mass.
Vestian’s team helped LabCorp avoid a heavily capitalized lease extension by negotiating a new lease extension option. Additionally, Vestian’s team helped LabCorp save on costs and maintain its flexibility to terminate its lease in five years.
LabCorp, which leases 90,000 square feet in Westborough, Mass., reached out to Vestian’s team in 2018 to help the company negotiate a lease extension. LabCorp was paying $15 per rentable square foot (pRSF) net, net, net (NNN), which was below market and could be renewed for three years.
LabCorp’s location fit into its plans for five years and possibly longer, so Vestian’s team was tasked with finding ways to reduce costs below the current lease extension option as well as securing tenant improvement, reducing rent, receiving concessions and maintaining flexibility to terminate in five years
After starting the lease negotiation process, Vestian uncovered the building’s owner Dell/EMC had plans to sell the building and would have difficulty selling without a longer-term lease with LabCorp. With this information, Vestian’s team was able to secure a lease extension of 8.5 years, with the right to terminate in five; reduce costs by $2.75 million; lower per annum GAAP by $275,000; and reduce rent from $15 pRSF NNN to $12 pRSF NNN.
- 90,000 rentable square feet
- Reduced costs by $2.75 million
- Lowered per annum GAAP by $275,000
- Extended lease by 8.5 years, with the right to terminate after five
- Reduced rent from $15 pRSF NNN to $12 pRSF NNN
- Eight months of abatement