Challenge

Bank of the West Center is a 229,132 square foot office building located in the Albuquerque Downtown Core and the Commercial Business District. The anchor tenant, Bank of America, had occupied over 105,000 square feet of the project for over 20 years. The Bank of America lease was scheduled to expire at the time when the national economy was in a recession and there was a significant contraction of the financial sector. It was the desire of the Owner to stabilize the occupancy and sell the building.

Solutions

REA was engaged by the owner to stabilize the building by solidifying the existing rent roll and secure new tenants for the newly available space at a time when the economy was in recession.

Results

Part of REA’s strategy to fill the vacant space was to conduct an evaluation of services that did not exist at that time in the Downtown. It became apparent during this evaluation there was a demand for daycare services in the Downtown. While not a traditional tenant, we recognized that a daycare would be a good fit as a tenant for the lower level of the Bank of America building as the newly available space included over 10,000 square feet of below grade office space with glass only along one side, attached to a secured courtyard. With this strategy our team identified potential operators of a daycare and let them know of the availability of space in Downtown Albuquerque. An early childhood development center expressed interest and we worked together to design the daycare space. The daycare is a significant amenity for the Downtown core, the program includes over 11,000 sf of indoor space and 3,100 sf of outdoor playground.

Also during this period, the buildings other largest tenant occupying approximately 30% of the building requested to exercise their right to contract and spend the outstanding improvement they had negotiated in their previous renewal. Based upon our recommendations; the landlord agreed it would be an opportune time to explore the possibility of extending the lease term to stabilize the building’s occupancy. REA was successful in negotiating a lease that was beneficial for the tenant as well as the Landlord which included an extension, restructuring of the parking rights to be advantageous for the Landlord’s leasing efforts; restricted expansion rights and removed many of the encumbrances the tenant had for the existing vacancies in the building and extended the term by 8 years.

These primary transactions in addition to a number of smaller leases, the Owner was able to sell the building.