Challenge
Medical Mutual, a Fortune 1000 health insurance company, had two sales offices in the same State Capital metropolitan region, a small downtown office and a larger office in an outer suburb. Both offices had leases that were expiring conterminously. Given the impending lease expirations, the client recognized the opportunity to consolidate these offices into a single location.
Beyond consolidating their real estate footprint, Allegro was tasked with managing a transaction that addressed three strategic criteria. First, by merging offices to a single downtown location, the Client’s intent was to be in closer proximity to its largest customers, including four of the five state retirement systems. Second, locating a building that offered high-profile signage visibility in a critical location in the State Capital was important to the client. Finally, consolidating offices would need to create a cohesive synergy among the consolidated employees.
Solution
Medical Mutual engaged Allegro to guide them through the process of procuring a new, consolidated office location and improving its signage and branding presence in the State Capital. Initially, Allegro met with the client’s management team to understand the primary location decision criteria. Besides financial and operational needs, a critical driver for any potential location was improved signage and visibility.
After conducting an extensive survey of the downtown market, Allegro and the client met to discuss the strengths and weaknesses of the options on the long list. The locations were filtered by location, branding opportunities, image, and cost. Upon winnowing down to a short list, Allegro facilitated space tours and initiated leveraged negotiations with finalist properties, while providing a clear understanding that signage would be a critical decision factor, notwithstanding the challenge that the space requirement was modest. Throughout the negotiation phase, Allegro was concurrently working with the municipal government on economic incentives that would be made available due to the potential suburban job relocations.
Allegro then helped the client limit the options to two or three properties after conducting comprehensive financial analyses, reviewing initial space plans, and analyzing proposed signage. As is the case any time Allegro represents a tenant, its main goal is to create a market for its client’s tenancy. Because real estate decision-making is often linear in scope, it can be difficult to ensure the proper amount of due diligence is conducted on new opportunities that come to market late in the decision making process. The success of this project rested on Allegro’s ability to quickly analyze and shift direction when a new opportunity presented itself late in the tenant representation process.
Medical Mutual ultimately determined this last property was the best fit, despite its late entry just before a final decision had to be made. In the end, Allegro successfully negotiated a tenant-friendly lease, a meaningful tax incentive related to the attraction of new jobs into downtown, and two exterior building signs at very prominent locations directly across from the statehouse, one of Medical Mutual's largest clients.
Client Testimonial
Allegro was strategic and diligent in guiding us through a seamless real estate transaction, creating a consolidated footprint for our new office. Additionally, securing the building signage will help grow the company’s brand in this market.
–VP Corporate Development & Real Estate
