209 Perry Parkway, Gaithersburg, MD

Highlights

• The Building Owner had an upcoming lease expiration, and there were strong indications that the tenant agency wished to stay in place following the end of the current lease term. 
• CBRE FLAG worked with the Building Owner starting 18 months before the lease expiration to prepare an unsolicited proposal, which set the stage for GSA acting through one of its broker representatives to follow up with a “succeeding” lease procurement. This ultimately led to a favorable new, 15-year firm-term lease, which commenced the day after the current lease expired.

Challenge

• GSA retained a broker to analyze and investigate the future space needs for a Department of Commerce user.  CBRE FLAG knew that the broker had received the task order for this facility need.
• While the tenant agency had a continuing space need, the Government’s initial inclination was to conduct a competitive procurement.  It was uncertain what term the Government would seek. 
• The Building Owner wished to retain the tenant and felt the existing space fully met the tenant agency’s needs. The Client felt it could make a compelling offer, provided the Government would consider a 15-year lease term.
• While the lease expiration was 18 months away, the Government was only just beginning the procurement process, and there was the possibility that a new lease would not be in place before the current lease expired.

Results

• CBRE FLAG worked with the Building Owner to determine terms for an unsolicited proposal to jump-start the lease renewal process. This proposal offered the space as existing but included terms allowing for turn-key improvements once the scope of work was confirmed.
• Once the Government received the proposal, it had the desired effect, and the Government moved forward with a succeeding lease procurement for a 15-year lease. 
• The final lease was consistent with the initial unsolicited proposal with a rental rate that was adjusted to include the cost of the modifications and renovations the Government required to agree to the 15-year firm term lease.