Every client is different. Some know exactly what they want and begin the process by telling us they will only seek alternatives in a very specific geography and price range. Others, like Chalkstream Capital, are more open-minded. Yet despite clients’ different office preferences, two universal truths about office leasing are that 1) companies’ business decisions always drive their real estate and 2) flexibility is extremely important when negotiating a lease.
Chalkstream was a group open to all office alternatives; specifically, they were willing to consider built/raw space, short/long term, sublease/direct, and willing to prioritize the right office over a specific location. For a broker this open-mindedness can be challenging, but it is our job (and something we believe we’re very good at) to present all office alternatives and implement a process that helps our clients determine their preferred criteria. Throughout our work with Chalkstream we toured the East Side, the West Side, built space, raw space, subleases, direct options, furnished space and unfurnished space – ultimately narrowing down a short list to include a built sublease at 444 Madison Avenue and a raw floor at 579 Fifth Avenue.
At first glance, these two options may appear very different; one a short term, plug & play space while the other a long term direct deal that would need to be built out. However, both spaces are full floors in boutique buildings with good natural light. By touring many, Chalkstream was able to recognize what it likes; those attributes became their preferences.
We began negotiations on both properties however in the end, Chalkstream concluded that the sublease at 444 Madison was the best alternative for its business (again – business before real estate.) A major part of that decision was that we were able to negotiate uncommon flexibility for them. Given our knowledge of the space being on the market for some time, the sublandlord recently having a deal fall through in late stages and that no one was occupying the space, we pressed the sublandlord to allow Chalkstream to sign a 3-year deal with an option to renew through the end of the lease term. This important renewal right allows Chalkstream to be in control of its own destiny with flexibility not common for a sublease. Thus, the combination of built, furnished space (common for many subleases) with an extremely uncommon renewal right made this space a win-win for Chalkstream and its future business needs.