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CASE STUDY: Maximizing Leverage and Savings for HSF Affiliates
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Background
HSF Affiliates was one year into a five-year office lease with The Irvine Company when our brokerage first initiated contact. At the time, HSF had retained a veteran broker for their previous lease transaction but had secured only average concessions and left critical boilerplate terms largely unchanged. Over the next two years, we periodically reached out with market insights and updates. Once HSF had two years remaining on their lease, they asked for our complimentary assessment of their contract.
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Challenge
Upon reviewing HSF’s lease, it became clear that the limited modifications to the standard landlord-friendly agreement had already cost them thousands of dollars in operating expense pass-throughs. The most significant oversight was the omission of a Prop 8 protection clause, which alone caused their monthly operating expenses to double in the final year of their term. HSF needed a strategy that could:
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Protect them from escalating operating costs and hidden fees.
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Leverage their growth and full-floor occupancy to negotiate more favorable renewal terms.
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Implement contract language that minimized risk and provided more robust tenant protections.
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Approach
After signing the necessary NDAs, we became HSF’s Exclusive Broker. Recognizing that rental rates were trending upward and vacancies were declining, we initiated renewal negotiations early—even with two years left on the lease. By positioning HSF as a valuable, full-floor tenant with future growth potential, we created a strategic advantage in a strengthening landlord market.
Key Moves
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Early Renewal Discussions: Secured an amendment to lock in favorable renewal terms well before the lease’s 2017 expiration.
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Market Intelligence: Used real-time market data to demonstrate that rents were set to rise, giving us additional leverage to negotiate below-market rates.
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Client-Focused Advice: Recommended a shorter-term lease despite a larger commission opportunity on a long-term deal, because it allowed HSF to potentially capitalize on a future tenant’s market.
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Results
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Significant Rent Savings: By the time the 2017 renewal took effect, starting rates in the building had increased by 10% for other tenants—yet HSF’s rate remained locked at the earlier, lower level, generating hundreds of thousands of dollars in savings over the lease term.
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Improved Lease Protections: We addressed the original boilerplate shortcomings to ensure HSF had robust operating expense protections, mitigating the costly pass-throughs they had previously incurred.
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Enhanced Tenant Benefits:
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Tenant Improvements: Secured concessions for complete space renovations.
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Above-Standard Parking: Negotiated an increased parking ratio to accommodate HSF’s growing headcount.
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Monument Signage: Preserved high-visibility signage rights.
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Right of First Refusal & Right to Renew: Maintained flexibility and expansion possibilities.
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Our client-centric approach also meant accepting a lower commission for a shorter lease term, prioritizing HSF’s long-term advantage over immediate financial gain for our brokerage.
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Conclusion
By starting negotiations early, exercising market knowledge, and prioritizing the client’s needs above all else, we not only protected HSF from escalating expenses but also gave them the lease flexibility to thrive in a changing real estate market.
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