ASSIGNMENT: Boston Realty Advisors was introduced to the two founders of Digital Results group in the early stages of the company, back in 2012. Located in a shared workspace, DRG was facing mounting occupancy costs and a constrained work environment and culture. Focusing on its unique needs as an organization, BRA identified the ideal options in the market for DRG to expand and recruit top talent in Boston and ultimately negotiated a below market transaction in the ideal building for the DRG’s long-term growth.
Following an acquisition by Novetta in 2014, BRA was retained to continue its role as strategic real estate advisor for Novetta/DRG and embark on a major growth plan for the Boston office. Now the assignment was to advise Novetta on their growing real estate needs in the Boston Class A office market. Novetta was poised to grow in excess of 250% and need to ensure that they secured enough space today while controlling options for the future.
APPROACH: Boston Realty Advisors engaged the landlord who had recently acquired the asset to understand expansion options that were adjacent to Novetta’s suite as well as future expansion options. Boston Realty Advisors provided Novetta with a list of options that included their existing building as well as adjacent Class A buildings with comparable availabilities. Additionally Boston Realty Advisors provided market comparables and financial modeling for the short list of options.
The choice became clear; to lease in their existing building and relocate to another floor. The primary driver was ease of transaction, ability to obtain immediate swing space and relinquish the existing space when the new space came online. Novetta’s management team didn’t want to move their engineers more than once. The initial focus was to be the anchor tenant on a multi tenanted floor. That was scrapped due to the forecasted growth and we focused on a full floor with a phased in rental structure. Novetta secured an entire floor with vertical expansion opportunities on a long term lease.
RESULT: Negotiated two lease amendments equaling a 338% increase in the Boston location. Phased in rent obligations to match forecasted revenue growth. This was accomplished while the Arlington Capital sold Novetta to The Carlyle Group.Tags: Case Study, Downtown office, Financial District, Novetta