Special Olympics (SO) is the world’s largest sports organization dedicated to individuals with disabilities. SO occupies 33,884 square feet and is headquartered in the Central Business District of Washington, D.C. Two of the main reasons why this building worked so well for SO were its central location and easy access to the metro. As a subtenant of Verizon, SO determined it was the right time to evaluate their options when they received notice that Verizon was renegotiating their prime lease.
SO engaged West, Lane & Schlager to assess their existing real estate situation and identify possible alternatives. WLS identified a couple key challenges. The first was how to create leverage despite there being 24 months left on the sublease. Secondly, even though SO was paying above market, they needed to address various deficiencies in their space and didn’t want to come out of pocket.
WLS negotiated a sublease that addressed the above market rental rates and deficiencies within their space 19 months prior to their original sublease expiration. Some of the key business terms we achieved for SO during negotiations included significantly reducing the rental rate, funding all improvements through free rent offset and addressing all issues well in advance of the sublease expiration date.
WLS found a solution for SO’s space requirements: create leverage during the negotiation process by finding a realistic and cost effective relocation alternative, significantly reduce yearly occupancy costs, and make sure the concession package fully offsets the cost for the improvements within the premises. Based on the goals determined at the beginning of the process, we successfully met all of SO’s requirements while saving the organization more than $1 million due to the early restructuring of the sublease.