Challenge: Since inception, Baker Hill Corporation had continued to grow at a rapid but consistent rate and became one of Indiana’s top information technology companies. Baker Hill wanted to enter into a lease arrangement that would allow the company to effectively manage its long-term expansion and avoid the repetitive and costly “Five Years and Move” lease scenario. CARMEN developed and implemented a strategic real estate plan to parallel Baker Hill’s strong and consistent growth and provided expertise to manage the operational cost for their office facility.
CARMEN Commercial began working with Baker Hill in late 1993. The company had expanded three times while in its initial lease. However, each of the office expansions made the company’s office space less efficient and put Baker Hill in an unfavorable position when negotiating rental rates and other business terms of the office lease.
Strategy and Solution: Under the direction of CARMEN, Baker Hill relocated its offices to a new 8,000 square foot facility in the same geographic area as their prior office. CARMEN Commercial Real Estate negotiated expansion terms that allowed Baker Hill to grow during the lease term without adding lease term, thereby avoiding being “locked” into office space without the ability for further growth. During this 5-year lease term, Baker Hill exercised two expansion rights, growing the office space to over 15,000 square feet.
In the summer of 1998, CARMEN and Baker Hill began developing a strategic plan for a new facility that would allow the company to continue its growth for a decade without a complete facility relocation. CARMEN began working with commercial real estate developers to construct a building with Baker Hill as the anchor tenant. In addition to negotiating flexible growth options, this strategy allowed the company to have a facility custom designed to meet their specific technology requirements. In the summer of 1999, Baker Hill relocated to a 30,000 square feet office space within a new 90,000 square foot Class “A” office building.
In 2005, Baker Hill elected to expand by approximately 15,000 square feet within the same building. With one year remaining on the existing lease, it made sense to tie the office expansion with a renewal of the lease on the existing 30,000 square feet of space. However, rather than simply renew and expand the lease, CARMEN led the Baker Hill leadership through an evaluation of the market in order to identify alternative office solutions that would meet the company’s growth and environmental needs. Introducing competition helped CARMEN to negotiate an office expansion and renewal that was at least 14% less costly than comparable office leases located in the Carmel, Indiana submarket. During the lease negotiation, Baker Hill Corporation was purchased by Experian. CARMEN ensured that Experian’s real estate needs were being met as well.
In addition to negotiating the office lease expansion and lease renewal, CARMEN helped Baker Hill negotiate with the State of Indiana for incentives for the company to grow, culminating in Baker Hill receiving capital investment tax credits and employee-based EDGE credits.