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
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