Project I

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714 Market Street

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• Community Behavioral Health (CBH) is one of the country’s largest behavioral health managed care organizations devoted to serving the public sector and is the only one operated by a governmental body. 

 

• CBH was born at 714 Market Street where Real Estate Investment Strategies, Inc. first found space for this new start up entity.  During the next seven (7) years there were several expansions.  REIS did each one and they were the “go to” consultants during CBH’s tenure at 714 Market Street.  REIS was paid when commissions were earned by the Landlord and then did a tremendous amount of work during this time without any compensation from CBH.

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Project II

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801 Market Street, 7th Floor

60,662 square feet

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• As discussed above REIS has advised CBH on its real estate needs for over eighteen (18) years and when CBH’s former lease was coming due in 2003, REIS took the lead role in assessing CBH’s facility needs and real estate options.  CBH had grown substantially over the previous five years and at this point its staff of over 300 people occupied 71,000 SF on three different floors.

 

• With CBH required to be accessible to its clients 24 hours per day, extending its existing lease and not interrupting operations was the easier solution.  However, CBH’s existing location 714 Market Street was sprawling and not well designed, since it was the result of multiple expansions.  CBH recognized the inefficiencies of its layout and REIS did a full search for space that would accommodate the entire CBH staff in an efficient manner.  In addition, CBH expressed a desire to have two related organizations join them in their facility.  REIS presented three new building alternatives to CBH and entered into negotiations with each.  At the same time, REIS was working directly with CBH’s space planner on developing construction specifications in preparation for bidding on the build-out of each possible space.

 

• Once a final candidate building was selected, REIS continued its work representing CBH in negotiating an office lease that not only provided CBH with excellent financial terms, but also protected CBH by providing flexibility to reduce or expand the size of the space as required by CBH’s needs.  During negotiations, REIS relied on its extensive experience with office condominiums, as the selected building was legally structured as an office condominium with two separate owners.  Afterward, CBH’s lead counsel noted this was one of the strongest tenant leases he had seen.

 

• Although a lease had been executed, REIS as noted above continued to work.  The new space would have to be completely built out in a short time frame.  As a value-added service, REIS worked with CBH’s selected contractor and architectural firm throughout the future construction process.  REIS negotiated contracts and attended weekly construction meetings.  REIS watched every expenditure and REIS worked hard to get the space completed on schedule and within budget.

 

• During this same time frame REIS knew the contractor that had been selected as the low bidder and because they had done some of the previous expansions for CBH, REIS alerted CBH.  Based on REIS’s alert, CBH paid strict attention to payments to the contractor and its work and unlike the other Residential project which went into a law suit with this contractor CBH’s work was completed and it was on time.  No easy feat!  The contractor did eventually go out of business.

 

• The end result – CBH relocated to newly finished space without interruption, increased its worker efficiency and, in the process, reduced its space requirement by allowing CBH to be on one floor and be in a much better building.

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Project III

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801 Market Street, 7th Floor

60,662 square feet

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• As a value-added service REIS offered to CBH as one of its long-term clients a review of their rental invoices to assure the economic terms of the lease were being followed.  CBH had not sent REIS their operating expense reconciliations until CBH started to discuss with REIS the potential of any extension for the lease.  REIS’s first step was to review all of CBH’s past invoices.  REIS’s review was expected to be fairly simple, but it took REIS over two months of computer modeling to track down a very misleading and hidden approach to the billing.    Once uncovered it was stunning how much money would be returning to CBH and how much future billing would not occur. 

 

• REIS spent more than three months working through billings and misbillings that were remarkably impossible to be identified without a huge background in real estate and engineering.  It took enormous effort and work by REIS and we at CBH were extremely grateful.  There were several misbillings that were not obvious and fairly well hidden.  There was one huge misbilling and it took extreme dedication by REIS to find it for CBH.  The resulting process to get CBH’s huge amount of overpayments back and to stop the misbilling process took REIS over a year.  The Landlord initially acknowledged the over billings and did not cooperate and REIS did all of its work without any charge to CBH.  REIS is a truly professional firm.  They could have done the lease renewal during this time frame and received a commission in the year they worked for free and no one at CBH would ever have known about the misbillings or have ever found them.  These misbillings were buried and you would have to have been a lease and billing expert to know where to ever start looking.

 

• Once the difficult lease audit process was completed REIS negotiated with the landlord to achieve CBH’s goals and objectives and to renew the Lease.

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Project IV

 

801 Market Street, 11th Floor

41,475 square feet

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• CBH has continued to grow since moving into its location on the 7th floor of 801 Market Street and in late 2012, REIS was requested by CBH to pursue additional space to accommodate their growing organization as well as allow more workspace for CBH’s current employees.

 

• The seemingly simplest solution was to expand within 801 Market Street as space had become available on the 11th floor of the upper condominium unit in which CBH was located.  However, during REIS’s discussions with the landlord of the condominium unit, the landlord defaulted on its loan resulting in a Special Servicer taking control and the condominium unit being placed in receivership.  This caused all of REIS’s discussions to come to a halt, jeopardizing CBH’s time frame and its ability to grow.

 

• Once the Special Servicer was somewhat in control of the 11th floor REIS was able to negotiate an extremely favorable economic Lease.  However, working with CBH’s counsel REIS had to convince the Special Servicer and Receiver that they had taken the Building over incorrectly and that the Special Servicer, instead, did not have the authority to execute the Lease.  It took several extra months, but with great perseverance the Special Servicer did finally get its documents corrected.  Interestingly, at first the Special Servicer and all of the other attorneys on the other side did not believe they had an issue.  REIS was then heavily involved in the construction of the new space, from bringing in a contractor who eventually won the contract to build-out the space, to reviewing architectural drawings, maintaining the budget and attending weekly construction meetings.

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Project V

 

801 Market Street, 11th Floor

9,680 square feet

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• While building out its new space on the 11th floor of 801 Market Street, CBH recognized an opportunity to assist related agencies by housing them within CBH’s space and therefore CBH leverage its position within the Building and expanded further by adding to its overall premises the remaining vacant space on the 11th floor.  REIS presented this potential expansion to the Special Servicer as a further opportunity for the Special Servicer to enhance the value of the Building and, with that, REIS was able to achieve very favorable economics for CBH.  With its real estate, design and construction team already in place, CBH added the space and built it out quickly and in a manner consistent with its existing spa

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Project VI

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801 Market Street

22,395 square feet

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• CBH continued to succeed and therefore required still additional office space. With the Building now under new ownership, REIS leveraged its long history with not only CBH, but also with the Building, to negotiate very favorable terms, which CBH presented to its Board and quickly gained approval.  During this negotiation REIS established a relationship with the new owner of the Building, providing the owner with a history and continuity of CBH’s relationship with the Building.

 

• This new space had been previously occupied by a very large organization that had occupied the entire floor, but who was now relocating to another building.  In so doing the previous tenant was unable to take with them the high-end workstations and office furniture currently in place.  Knowing this might help CBH, REIS seized upon the opportunity and negotiated into the lease amendment a right for CBH to take ownership of any and all existing workstations and furniture currently in place, and not just in CBH’s space but any furniture on the entire floor.  This opportunity allowed CBH to choose and take ownership of enough furniture and workstations to meet the needs of this 22,395 SF space, which saved CBH a significant amount of money.

 

• Since CBH had been a long and loyal tenant to the Building, the landlord also agreed to offer a further accommodation to CBH by dedicating space in the Building as a tenants’ gym.

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Project VII

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801 Market Street

7,817 square feet

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• Given CBH’s continued growth and with the Building now under stable ownership, available space within the Building was becoming scarce.  Seeing this and having another need for more space, CBH chose to take a smaller portion of space on one of its existing floors.  REIS presented the opportunity to ownership and they agreed to offer the space on the same terms as the previous space was offered.  Timing was critical to CBH and, with the team in place, the project was moving along quickly.  However, a significant hurdle arose just prior to the onset of build out when CBH was informed by the Building they had made a significant error in that a portion of the space leased to CBH was required to be dedicated as a common corridor and therefore not available to CBH.  This error caused a significant disruption in the project as design was complete and CBH had received approval to assume the added rent and related costs.

 

• Knowing the timing, operational and financial impacts this would have, REIS acted quickly to protect CBH.  REIS calculated the negative cost impacts, as well as the operational concerns faced by CBH and so negotiated directly with the landlord to receive adequate compensation for CBH.  Given the circumstances the landlord agreed to make CBH whole.