The Challenge
Trillium, a provider of vacuum pumps and abatement products, occupied approximately 20,000 square feet of manufacturing and office space in Southeast Austin.
After seven years in the space, the company was outgrowing the size of the current space, but still had two years left on its current lease.
Trillium needed an additional 5,000 to 10,000 square feet, and their current building did not have enough room for them to expand.
However, Trillium had put hundreds of thousands of dollars into building out its manufacturing facilities in its current space. It would be both costly and inconvenient to relocate the facilities.
The Approach
Despite the time remaining on the lease, Trillium engaged AQUILA to help solve their real estate needs.
AQUILA took them into the market to see what options were available at comparable Austin properties. During this time, we also maintained an open dialogue with the landlord.
During the site selection process, AQUILA became aware of a potential new space available at Trillium’s current building. Another tenant had gone out of business, and, because of the open communication, the landlord let AQUILA’s team know before bringing the space to market.
This was an ideal solution for Trillium. However, because we were already in the market considering several other viable options, AQUILA was able to create leverage in negotiations with the current landlord.
The Results
Trillium renewed its current lease and expanded into a total of just over 29,000 square feet.
AQUILA secured a rate for Trillium that was $1.80/SF per year lower than the original proposal. A savings of more than $360,000 over the life of the lease.
Additionally, AQUILA secured a TI allowance for Trillium to be used to build-out the new space and make necessary improvements to their current space. We also negotiated non-economic terms related to future options and HVAC language that will yield additional savings throughout the term of the lease.
By entering the market early and allowing for sufficient time to leverage alternative options, Trillium ultimately put themselves in a favorable position to complete a successful transaction.
Featured image courtesy of CoStar.
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