GXS, the world’s largest business-to-business e-commerce firm, was close to completing a sublease with Montgomery County that allowed them to vacate their 350,000 SF headquarters and “right size” into approximately 80,000–100,000 SF. The challenge was they had no broker, no new home and the sublease required that they vacate the building in less than nine months. Further complicating the process was the state of the financial markets. Many of the properties with adequate space had significant risks associated with the ownerships’ ability to execute the transaction and provide the required funding. Lastly, GXS had gone through significant organizational and operational changes; the relocation was an opportunity to rebrand the company and create an entirely new culture…in a few months!
Consideration & Analysis
In just a few days, a complete project team was assembled and mobilized. Paul’s team worked with GXS’s management team and Fox Architects to develop a comprehensive facility program and space plan for multiple short-listed properties. A sophisticated rating system was developed to capture and grade many different aspects of the properties; such as base building definitions, landlord strength, municipal incentives for each property, and financial and non-financial considerations. Employee commuting patterns were carefully analyzed to determine the potential impact on relocation.
Due to the time constraints, Paul and Adam saved 2-3 weeks by sending a comprehensive Letter of Intent to five developers of the short-listed properties, with the economics to be completed by the developer, thus bypassing the entire RFP process and streamlining negotiations. Ultimately two properties were chosen and final negotiations were conducted with both parties.
Within 48 calendar days of retaining Paul and Adam, GXS had an executed Letter of Intent with Washington Property Company, a fully executed lease within 90 days, and a newly built-out office space within 260 days. The team successfully navigated negotiations with the local developer, its private equity partner and the two banks in the lending group, one of whose parent had just filed Chapter 11 bankruptcy and was facing a potential FDIC takeover. GXS achieved best in class pricing, completed its project on time and under budget, received municipal incentives, and negotiated prominent building signage and significant financial concessions from the landlord.