Snow Software, an AQUILA client, was rapidly growing; they had expanded three times in just three years and occupied nearly 9,000 sf in a mid-sized office building downtown Austin.
Snow Software anticipated continued growth and was looking to expand; however, they had reached their maximum capacity within their building and still had multiple years left on their lease.
The client did not want to open a satellite office, so AQUILA’s brokers searched for a new office space that could accommodate Snow Software’s entire Austin team while also accommodating their anticipated growth.
A Large Requirement in a Competitive Market
AQUILA began the search for a new, 40,000-sf office location that would meet Snow Software’s new requirements.
Snow Software wanted to stay within Austin’s core, either the CBD or the area immediately surrounding. This presented a challenge, as the market at the time was very competitive and large blocks in the CBD were limited.
AQUILA conducted a comprehensive market survey and used our extensive market knowledge to present the client with several potential relocation options.
An Existing Encumbrance
The option that Snow Software ultimately preferred was Capstar Plaza, a property located on the western edge of Austin’s core, at Fifth Street and Mopac Expressway, which happened to be represented at the time by the AQUILA project leasing team.
The space that Snow Software was interested in at Capstar Plaza was still encumbered by a tenant who had multiple years remaining on their lease, but no longer occupied the space. This meant that the landlord had no real motivation to take back the space and sign a new lease for the space.
Snow Software was not interested in subleasing from the existing tenant, since they needed the finish out allowance that could only come from negotiating directly with the landlord.
An Attractive Tenant
Snow Software proved to be an attractive tenant for the landlord since they were interested in such a large block of space and they were willing to take on a long-term lease in return for significant finish out concessions.
This long-term, large-block commitment was enough to convince the landlord to terminate the existing lease with the prior tenant.
Leveraging Broker Relationships
As negotiations were coming to an end, Snow Software began internally reevaluating their needs and potential growth plan. Ultimately, the client determined that they required only half of the space and a shorter length of term. This drastic change was significant enough that it might have killed the deal with most landlords.
However, because of the longstanding relationship and trust between AQUILA’s tenant representatives and project leasing brokers, the transaction was able to still move forward.
Not only was the team able to still get the deal done at the size and term the client desired, AQUILA was able to keep the terms that mattered most to Snow Software, including building signage rights and a significant TI allowance, sufficient enough to create a beautiful space for their employees.
Once the lease was finalized at Capstar Plaza and interior renovations were underway, AQUILA turned our attention to Snow Software’s existing obligation at their downtown office. AQUILA was able to negotiate a termination with the existing landlord with minimal termination fees. This relieved the client of all remaining obligation and eliminated the risk inherent with subleasing space.