IBM Philippines: Exploring Bundled Renewal For Its Buildings
01 THE CHALLENGE
IBM initially planned to renew its leases separately. However, Building E's negotiations created an opportunity for a bundle renewal. This option did present some challenges though. The landlord required an early renewal of a lease expiring two years down the road.
To lower rental rates and get favorable terms, IBM approached Cushman & Wakefield for advice.
02 THE SOLUTION
UPA Technohub's lease renewals were subject to a cap and collar of year one's base rent renewal at no less or more than 10% of year five's current base rent. From this, the landlord was already offering a base renewal rent that is 6% lower than Building E's expiry rent. However, we still explored a bulk renewal to push for better prices and terms.
For IBM's review of options and related costs, our team prepared 10 scenarios, including, among many others:
- Separate renewals upon expiry
- Bundle renewal for full five years
- Bundle renewal with the same expiry date
03 THE RESULT
Meet the Team
WE’RE ON HAND TO HELP
Centre of Analytics
Are you ready for what’s next in commercial real estate? Our consultants can help you tackle a wide range of business challenges, including workplace strategy and change management, location and labour force analysis, and portfolio strategy.