"The city didn't want to lose them. The landlord didn't want to lose them," says Kurt Griffin, director in Dallas for Cushman & Wakefield of Texas Inc. "Everyone worked together in a spirit of cooperation to extend their tenancy at the building." Office Depot moved into the Texas 360-fronting structure when it delivered in the early 1990s as the first industrial spec product to rise in a region reeling from a real estate crash.
Griffin tells GlobeSt.com that the stair-stepped lease came with some tenant improvement dollars, free rent and a market rate. "There was some rent forgiveness," he says, adding the new rate is lower than what Office Depot had been paying at 2220 SH 360. The street-savvy contract has been at the bargaining table for six months.
"It was their preferred choice to stay there," Griffin says of the Delray, FL-based retailer, "but we certainly knew what the options were before we negotiated the renewal." Griffin and Office Depot's corporate account holder, Michael Sidney, director in C&W's Los Angeles office, were bargaining against Kacy Jones of Dallas-based Holt Cos., who represents building owner TA Associates' Fund VI.
Office Depot uses the location as a customer service center to house inventory for all Dallas/Fort Worth stores. As a result, the facility generates more sales tax than any other single tenant in Grand Prairie, Griffin says. The city got involved in the talks, but the outcome is not public information.
The Great Southwest Industrial District, battling a high vacancy, has cornered several large deals of late in a pattern of aggressive negotiation from brokers sitting on both sides of the fence. C&W's third-quarter numbers showed industrial rent ranged from $3.17 per sf to $8.48 per sf.
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