Converting Annual Lease to Multi-Year Lease Results in 32% Savings

Client Objectives

The Georgia Vocational Rehabilitation Agency (“GVRA”) has occupied 10,086 RSF at 500 East Walnut Avenue in Dalton since October 2010 under an annual lease. The premises were built out to GVRA’s specifications and were well maintained by the Landlord. Due to the favorable location and good condition of the building, the Agency wanted to continue exercising its renewal options under the lease and remain in the space. However, the State Properties Commission (“SPC”) noticed that the rent for this location was unusually high when compared to the average market rents for similar buildings in Dalton. This was partly because the 2.5% annual rent escalations in the existing lease had driven the rental rate up to $29.17/RSF, or nearly $300,000/year.