|CLIENT||Ernest Packing Solutions|
|SERVICES||Brokerage & Advisory Services
|PROPERTY SIZE||108,758 SF Flex Warehouse|
|FINANCIAL BREAKDOWN||24% Savings over 7 Years|
Ernest Packaging Solutions, a California corporation, selected McKinney Advisory Group to assist with their real estate needs in Vista, California based on Ernet’s relationship with McKinney on transactions in California, Oregon, Texas, and Nevada. McKinney Advisory’s specialty with large portfolios, helped us understand the client’s growth objectives, business strategy, and other real estate overhead requirements. This allowed for a comprehensive approach to Ernest Packaging Solutions’ existing requirement in Vista.
Ernest Packaging requested that McKinney Advisory Group assist in their early renewal and negotiation of their current lease with lower overhead costs, as well as, survey market options to confirm the most competitive rates.
Ernest had three major areas of concern that McKinney had to address when negotiating their lease renewal. First, acquiring property tax protection at below market rates to ensure lease concessions in the event of the sale of the building by owner. Secondly, the security deposit was much higher than market rates and needed to be reduced. Thirdly, management fees were extremely high on the building and a cap was an important part of negotiations to keep overhead and costs from growing out of control for our client. Remaining at their site was exceptionally crucial for the client to avoid any costly interruptions in business and inconvenience for customers.
In order to compare their current building to the market options, McKinney analyzed the client’s existing space, side-by-side, with similar locations within the market. McKinney performed extensive research of the industrial market, within a 15-mile radius to Ernest’s existing location, including off-market options. Four potential relocation properties were identified as viable options for the client and McKinney initiated negotiations simultaneously. Leveraging the competition created from the proposed alternative sites, McKinney was able to negotiate an attractive lease renewal with the current landlord. McKinney was able to accomplish all three of the client’s financial goals. McKinney was able to achieve 24% cost savings to the client over the new 6 year term.