Helping a U.S. Tech Company Negotiate a New Lease North of the Border
We secured a new 7-year lease with a reduced footprint for a technology company in Canada.
Our client leased in excess of 16,000 square feet of office space and 1,000 square feet of storage space with roof rights to house its Canadian office from a large Canadian commercial property owner and manager in Kanata, Ontario. Their original lease was set to expire October 31, 2020. We negotiated a new lease starting November 1, 2020 expiring October 31, 2027 that includes an option for our client to extend the lease for an additional five years.
Rent on the newly leased space will increase by approximately 5.95% over what our client had previously paid, however our client will not be required to pay rent on the 13th and 25th months of the lease.
Additionally, the new lease will use materially less footprint than the original space currently occupied by the client, a substantial portion of which will be surrendered to the landlord on December 31, 2020 and until then our client can use the area as swing space without basic rent charges for the months of November or December 2020.
In order to update the space, the landlord will provide our client with a market rate improvement allowance per square foot and has agreed to provide a cap on their construction supervision fee. Within the first 60 days of the signing of the new lease, the landlord will oversee the construction of a new demising wall, HVAC and building systems. The landlord will then finish the new common corridor prior to November 1, 2020, and separately update the building restrooms and elevator lobby by December 31, 2021.
Financing for the landlord’s construction project will be provided by its lender, who will provide our client with a subordination, non-disturbance and attornment agreement for the new lease promptly after the parties enter into the agreement.