Case Study


Sector: Publishing

With a lease expiring May 1, 2020 Lulu, a leading online publisher, needed to develop a new plan for real estate during the height of COVID-19. Although, work-from-home was effective, Lulu required a long-term real estate plan which included returning to the office. Lulu also sought to provide employees the flexibility to work remotely, and/or come to a new office that allowed for safe social distancing and a state-of-the-art collaborative environment.

The current 21,534 rentable square foot office at 627 Davis Drive in Raleigh, NC did not provide the workplace-of-the-future Lulu imagined and annual occupancy costs were in excess of $520,000. Furthermore, the building was recently purchased by Longfellow (a large life science developer) and targeted for conversion to lab space and even higher rents.


Lulu’s CFO and President hired Vestian to develop a strategy to reduce cost and improve the workplace culture for future collaboration, while also creating flexible options for where and how employees would work. An initial target of 15,000 square feet was identified as an optimal footprint to support the business objectives and to house 75 employees. With COVID-19 slowing down the Raleigh-Durham real estate market, Vestian recognized that supply in the market was increasing rapidly. Demand for space, however, was non-existent as companies struggled with the future need for an office. Defining their long-term plan in a market where vacancy was increasing and landlords had no activity, created Tenant leverage not seen for over a decade.

627 Davis Drive (Existing) Boxyard Direct Deal Boxyard Sublease
RSF 21,534 14,812 19,580
Rate $24.50 $22.00 $17.50
Annual Increase 3% 3% None
Average Annual Rent $527,000.00 $385,000.00 $342,000.00
Tenant Cap Ex for move & FF&E NA $444,000 None (Brand New Furniture & Equipment Included)
Term Years NA 7 years 5 years
Total Cost over lease term NA $2,793,479.44 $1,713,250.00

“Vestian worked to reduce our footprint and costs, while helping us identify and outfit a new office that will foster a safe and healthy environment. Vestian’s collaborative approach and ability to successfully complete this transaction in a difficult environment provided us with measurable savings, while helping our team alleviate the fear of returning to the office space.” - Kathy Hensgen President of Lulu

  • The new lease, which upgrades the Raleigh-based company from a Class-B to Class-A building, includes six-months of free rent starting November 2020.
  • The new lease agreement saves the company 37% per year on its real estate costs.
  • New office space comes complete with brand new furniture and installations from the previous tenant, avoiding any capital expense for Lulu.
  • The space is an upgrade to a new modern office that offers safety, social distancing and workforce flexibility.

After touring six potential options and issuing RFPs for all viable options, Boxyard campus, owned by the RTP Foundation, was selected. Vestian identified a direct deal with the foundation, as well as a recently vacated, brand-new space yet to hit the market for sublease. Vestian leveraged both the direct deal and the sublease to secure the terms measured against status quo below. Lulu selected the sublease option to move in at end of Q1 2021.