Innogy Renewables US LLC – 150 N. Riverside Plaza
Challenge
Innogy Renewables US, a subsidiary of the German utility company Innogy SE, was growing again. The sublease entered into to house IR’s initial staff cohort was not large enough to accommodate its next phase of growth and that sublease would expire in a year. IR needed a new space, located in the West Loop and in a building that would project the right image to the marketplace, as well as attract talent. IR’s German parent was already negotiating a merger anticipated to be complete in a few years. This made it highly desirable to structure a lease whose length was considerably shorter than would be expected for a transaction in a new Class A property.
Action
MAP Real Estate had represented Innogy Renewables in its sublease and was asked to handle the next project. Working closely with the CEO and department heads, MAP led IR through the process to clearly define its program of requirements, allowing consensus around ideal location and layout. MAP conducted extensive market research to identify opportunities that would satisfy IR’s agenda, which included high-end space in a first class building in the West Loop. It was necessary to obtain a significant construction contribution from the landlord, but not be bound by a long-term lease.
In the alternative, Class A space that had either been built out on a speculative basis or that had the elements of IR’s ideal layout from a previous tenant, needing only relatively little modification, would also allow the lease term to be shorter than might otherwise be expected. MAP provided financial analyses of multiple potential transactions, allowing IR to select the spaces it wanted to put on a shortlist. MAP coordinated and led three tours of those spaces with the project-team based in Chicago, then with IR representatives that had flown in from Germany. MAP undertook negotiations with three owners of the newest Class A and trophy buildings that were just delivering raw space, as well as with four owners of Class A buildings that had been built in the previous development cycle.
Result
Innogy Renewables US was able to fully achieve its agenda, signing a short-term lease for 8,637 square feet of space on the northwest corner of the 42nd floor, becoming one of the first tenants at 150 N. Riverside Plaza, a new Class A building located only a few blocks from the commuter train stations in the West Loop. Terms of the 4 year, 4 month lease included a very large landlord construction contribution. The extraordinary combination of short term and large construction allowance resulted from the fact that the space was option space encumbered by the lease of the building’s anchor tenant. Because of the timeline of IR’s merger negotiations, option space was chosen as the perfect solution.
Testimonial
I have used MAP to support the search and negotiation of leased office spaces on three occasions over the past 11 years, and have always found just what we were looking for under tight timelines. Michael leverages his deep network and extensive experience on all fronts ranging from setting the first search parameters, to build-out specifications, negotiating lease terms, and final negotiation of the lease document. Michael works quickly, efficiently with high professionalism, He always delivers!
Andrew Young, CEO – Innogy Renewables US