Background

 

A division of First Data Corporation (formerly Fund Plan Services, Inc.) was housed in a 40,000 square foot, four floor suburban office building that was substandard and too small for First Data's needs. Its lease was expiring and it needed help in locating suitable quarters. We were referred to the company by its outside counsel, who is also a client of Huff Equities.

 

Goals

 

The Company’s business focus was to contain costs as much as possible, thereby enabling it to price its services more aggressively in a highly competitive market. This required low overall facilities costs in a very tight suburban office market. Furthermore, our search parameters were limited as First Data did not want to be located near major competitors for staffing reasons.

 

Finding The Right Fit

 

A full search of the suburban alternatives that met the economic and location parameters yielded very few candidates. The stay put alternative was unacceptable because of the condition and configuration of the building. This was exacerbated because the building owners were in dispute with each other and threw the building into a State court receivership, with a trustee appointed to oversee the leasing of the building.

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At this time, Liberty Property Trust, an aggressive REIT, had purchased several building lots from a bankruptcy trustee and was seeking build-to-suit opportunities. Being a public company, we were aware of Liberty’s goal of 11.5% return on equity. We were able to reach agreement with Liberty to work on an “open book” basis to determine the cost of the building and from there to structure lease terms for First Data that would yield Liberty’s return.

 

Tight Financial Controls

 

Working very closely with Liberty, Liberty’s architect, First Data’s space planner and Liberty’s general contractor, we designed and priced a 60,000 square foot building that was expandable to 90,000 square feet.

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Because of the complexity of the tenant’s requirements and the need to control costs, Huff Equities wrote the building outline specifications, which Liberty Property approved. The building and the tenant improvements were extremely well designed to meet First Data’s needs, with substantial upgrades in the lobby and main conference room. The structure of the rent schedule was based on the return on equity and all capitalization rates were established up front. The lease identified the formulas and we and Liberty Property built our computer models accordingly. The benefit of working together was substantial and First Data met its economic and operational goals.

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Construction was fast-tracked, requiring weekly job meetings and frequent meetings at other times. We established an excellent team that worked hand-in-hand to resolve each issue as it arose. The job came in on time and on budget, to the delight of First Data.

 

The Final Product

 

The visual impact of the space is that of a high-tech firm, and the new space had been a great success with the employees, clients and client prospects. We understand from First Data that they have obtained eleven new clients upon occupying the new building and they believed that their new premises helped substantially in so doing.