Challenge: T2 Systems needed to expand its Indianapolis headquarters to accommodate the rapid growth of the company. Its existing office building, located in an industrial business park, created a negative impact on the image of the organization, inhibiting its ability to attract the skilled technology workforce required to grow the business.
Strategy & Solution: Carmen helped T2 Systems identify Indianapolis’ geographic submarkets where the company could best attract a skilled labor pool and also be convenient for T2’s existing employee base, avoiding a significant turnover of employees through relocation. Once these ideal submarkets were identified, Carmen selected office buildings that best suited T2’s operations and helped the firm portray an image that would be attractive to its employee base, prospective employees, and customers. Carmen held to the aggressive facility budget guidelines provided by T2.
Carmen provided T2 Systems with over 20 building alternatives, from which a short-list of office buildings were selected. With Carmen's guidance, T2 selected the ideal top two properties and set up a bidding environment in order to drive the lowest possible rental economics and best possible business terms.
Result: T2 ultimately selected Keystone Crossing as its new home and leased 18,000 square feet of space at 8900 Keystone Crossing. In order to help T2 Systems further improve their bottom line, Carmen identified off-site office/service space for T2 Systems to locate its training and equipment staging functions at a rental cost 40% below the cost of traditional office space.
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2016 Update: Lease Expansion & Term Extension
Challenge: By Q3-2015, T2 Systems growth had made it apparent the parking technology firm would run out of office space by early 2016. In order to meet the forecasted growth for the next few years, T2 contemplated meeting its demand for office space by expanding its Keystone Crossing HQ or shifting personnel into a training facility the firm leased in neighboring Carmel, Indiana.
Strategy & Solution: Using strategic planning tools CARMEN has developed for such purposes, we developed operating models for both scenarios of growth: expanding the HQ, or; relocating personnel to a satellite office. In addition to simply measuring year-to-year rental cost, CARMEN examined the cost for FF&E (furniture, fixtures, & equipment) needed in each scenario. The extensive cost of office improvements needed to expand the HQ offices or remodel the training facility, had to be considered. Additionally, expansion of the Keystone Crossing HQ would involve the landlord’s relocating an existing tenant that occupied office space adjacent to T2’s offices.
Through CARMEN’s economic modeling, T2 Systems leadership determined the best path for growth was by expanding the HQ location. T2’s challenge was to expand, while utilizing the landlord’s funds to relocate the adjacent tenant, design and build-out the expansion office, and contribute to the FF&E T2 needed to make the expansion possible.
Result: CARMEN successfully negotiated the a “Turn-key” solution to T2’s above challenge, with the landlord paying to relocate the adjacent tenant, all of the design and construction costs, remodel the existing office, and allow T2 Systems to utilize any leftover construction allowances for FF&E. To fund these costs, T2 needed to extend the lease on the existing HQ office space, which helped the landlord to justify the extensive costs associated with the T2 expansion. However, in exchange for the lease extension, CARMEN was able to negotiate free rent on the expansion space as well as the existing office space, which essentially lowered T2’s average rental cost over the new term of the new and extended lease.