BancVue (now Kasasa) occupied approx 40,000 sf in Northwest Austin. They were bursting at the seams in their current office. The company was expanding quickly (even named the “Fastest Growing Company in Central Texas” by the Austin Business Journal), and they needed to find a new space that would accommodate their aggressive growth plans.
Additionally, they only had 12 months left on their lease, much less time than is ideal for a tenant of this size to begin the process of looking for new office space.
AQUILA began an extensive citywide market search to find all options that would meet BancVue’s specific requirements, which included:
- Maximum flexibility to meet the company’s growth plans
- Significant TI allowance
- Building signage
- Occupiable within 12 months
- Minimal security deposit/credit enhancements
After presenting the client with a comprehensive list of both new development and existing office options, AQUILA began negotiations with BancVue’s favorite properties.
By negotiating with multiple parties and by leveraging the size of BancVue’s requirement, AQUILA created a highly competitive environment between the landlords and, ultimately, was able to achieve favorable terms for BancVue.
Eventually, BancVue came to terms on a 62,000-sf space at Lakeview Plaza, an existing Class A building in Northwest Austin.
AQUILA was able to leverage the competitive landscape to negotiate highly favorable terms that met BancVue’s goals, including:
- Two fixed expansion options on over 10% of the building, giving BancVue exclusive rights to take the additional space should they need it
- A termination option, allowing BancVue the right to end their lease term early if the space no longer met their needs
- A sizable tenant improvement allowance, significantly above market rates for second generation spaces
- Prominent building signage rights
- Nine months gross free rent
In addition to these concessions, AQUILA was also able to secure a rental rate that was more than $4.70 per square foot per year below the average rental rate for comparable buildings in the Northwest Submarket, which resulted in savings of over $290,000 per year.
In 2016, AQUILA helped BancVue negotiate a favorable lease renewal at Lakeview Plaza.
By taking BancVue to market and considering all options, we were able to leverage a relocation opportunity in order to reduce the renewal rate by approximately $5.00/sf/year compared to the landlord’s original offer. Additionally, BancVue saved $1.4 million annually on their rent as compared to other tenants who signed their lease in the building at the same time.
AQUILA also knew that the landlord was interested in selling their building, meaning they were highly motivated to keep the building leased. With this knowledge, we were able to achieve an additional TI allowance of $15/sf and four months of free base rent.
Finally, AQUILA negotiated for another relatively short lease term, unusual in the market for a tenant of this size, in order to maintain growth flexibility for the client.