1. Team Experience
jc sALES
Challenge
JC Sales, a leading dollar store merchandiser for 99 Cent Only,
Dollar Plus & Dollar Tree, occupies multiple facilities in Southern
California totaling over 800,000 square feet. One of the buildings
occupied by JC Sales is a 267,500 square-foot warehouse located
in Commerce, CA, which serves as the main receiving and
distribution facility and supports the company’s overall Southern
California operations. The facility provides 24-foot warehouse
clearance, 10,000 square feet of office space, 20 dock-high
loading positions and a secure drive-around yard.
JC Sales originally occupied a portion of the Commerce facility
and quickly grew into the entire building. After years of occupying
the facility, JC Sales was experiencing deferred maintenance
issues that were causing unexpected operational issues and
costs. Newmark Grubb Knight Frank was introduced to JC Sales to
initially help evaluate the operations, while analyzing a stay versus
relocation scenario. With the lease expiring in 12 months from our
initial meeting, our team conducted a full building evaluation and
worked with our in-house Project Manager to develop a “building
deficiency” list. This list addressed all of JC Sales’ current
operational issues, future cost exposures, building deferred
maintenance concerns and upgrades that JC Sales ideally would
like made should they remain in the facility post lease expiration.
Action
Over the course of four months, Newmark Grubb Knight Frank
created leverage that pressured the existing landlord to
immediately address JC Sales’ tenancy while also exploring
alternatives within the market. We negotiated on multiple options,
including the existing building, and provided the current landlord
with documentation that supported a well above capital allowance
and a very aggressive rental package.
Results
The end result was an aggressive economic package that out
performed recent transactions within the market. By virtue of our
process, JC Sales received an early lease commencement valued
at $80,000 with a landlord funded tenant improvement allowance
of $342,000, achieved four months of rental abatement equal to
$449,000, reduced the net charges by $0.015 valued at $190,000
and the landlord assumed responsibility for any capital repairs/
replacements necessary to the building including the $350,000
cost for a new roof. The overall economics and landlord funded
capital allowance will allow JC Sales to operate from this location
without future cost exposures and below what they had previously
been paying.
Client:
JC Sales
Building Address:
7030 East Slauson Avenue
Commerce, CA
Transaction Type:
Lease Renewal
Size:
267,500 rsf
Services Provided:
Tenant Representation