NetSuite is the world's leading provider of cloud-based business management software, helping companies manage core business processes with a single, fully integrated system covering ERP/financials, CRM, ecommerce, inventory and more. Founded in 1998, NetSuite is headquartered in the Silicon Valley with more than 1,000 employees across nine offices throughout the U.S., Canada, Europe, Asia and Australia.
NetSuite leases 55,000 square feet of Class “A” office space at 5800 Explorer Drive in the business park known as Airport Corporate Centre in the City of Mississauga. With a lease renewal date looming, NetSuite retained the services of Savills Studley in May of 2012 to address the significant concern that its existing landlord would view NetSuite’s investment in its current premises as a barrier to relocation and use this leverage to negotiate above-market rental rates on a renewal of the lease.
Savills engaged its FLOW™ process with a significant focus on the strategic consulting and brokerage service elements of the process. The goal was to disrupt the landlord’s perception that NetSuite was captive by collecting credible and economical relocation alternatives to enable NetSuite to negotiate favourable rental rates and inducements from the landlord to remain in the building.
Savills worked with NetSuite’s executive team to ensure that the real estate plan aligned with NetSuite’s business objectives. To further ensure the real estate solution aligned with business goals, Savills also completed a detailed human resources analysis together with a functional workplace needs assessment.
The FLOW™ process revealed every potential relocation alternative in the Mississauga market. These results included a right-sized and built-out block of office space available in an alternative building owned by NetSuite’s existing landlord. This alternative, together with two other viable options owned by competing landlords, were used to convince NetSuite’s existing landlord that NetSuite was not captive and was seriously considering leaving the premises and relocating to a more tenable situation.
To strengthen the leverage, Savills engaged in a Request for Proposal (RFP) process with competing landlords and worked with NetSuite executives to analyse short-listed properties and compare them with NetSuite’s business drivers. Savills Harvard-based negotiation strategy orchestrated several sign-backs with different landlords, which ultimately convinced NetSuite’s landlord that its tenancy was worth fighting for.
Savills lowered our rental rates significantly and negotiated an enormous inducement package for us... Savills are very experienced and knowledgeable corporate real estate practitioners that helped our non real estate-centric executives make unfamiliar decisions logical, clear and easy.Heidi Everett, Manager, Global Facilities, NetSuite
Savills combination of proven process and exquisitely executed negotiation strategy not only rescued NetSuite from an expected rental increase but delivered a significant rent reduction and unbeatable tenant inducement package upon the renewal of its existing lease.