Evangelical Presbyterian Church

BACKGROUND

When Evangelical Presbyterian Church was approaching the end of their lease at 5850 T.G. Lee Blvd., they engaged Dan Van Nada, CCIM, and Ben Kuykendall to represent them in the renewal. On the surface, it looked like a routine transaction: a long-standing tenant staying in a space they already occupied, renewing for another term. But the team knew to look past the obvious.

The lease carried an expense stop tied to a base year that was years out of date. In a gross or modified gross office lease, base rent is calculated against operating expenses from a specific year. Any increase in those expenses above that base year gets passed through to the tenant. The older the base year, the more those pass-throughs accumulate. In this case, they had compounded into tens of thousands of dollars in additional cost.

It’s not a clause most tenants think to negotiate, and it rarely comes up unless someone on the team is specifically looking for it.

In addition to their desire to renew, they expressed a preference for a bit more square footage, if possible. Engaging with the Landlord’s broker, the team was actually able to broker a deal where EPC not only renewed but expanded into a portion of the neighboring space, taking it on as their own for the renewal term.

Image provided by Loopnet

SUCCESS POINTS

• Secured a 10-year lease renewal/expansion for 10,637 SF of office space at 5850 T.G. Lee Blvd in the South Orlando / Airport Submarket.
• Identified that the tenant’s existing base year was significantly outdated, generating operating expense pass-throughs above their base rent.
• Negotiated to bring the base year current as a condition of the renewal, eliminating the accumulated expense overages and saving the client tens of thousands of dollars over the renewal lease term.
• Positioned the base year reset as a standard ask in any well-represented renewal, giving the client a confident posture at the table rather than treating it as an unusual demand.

MORAL OF THE STORY

Stewardship means knowing what to look for. Most tenants going into a renewal focus on base rent and tenant improvement allowances. Those are the visible numbers. The expense language buried in a lease can cost just as much, and it rarely shows up in the headline terms.

Dan and Ben saw it, asked for it, and got it. A good tenant rep doesn’t just negotiate the rate. They identify and prioritize all of the deal terms, to the benefit of their client and their position.