NATIXIS

Client Situation

Natixis Global Asset Management occupied approximately 100,000 feet of office space under a long-term lease in a boutique office building in Back Bay, Boston.

The firm hired Columbia Group to evaluate its existing facility and future growth projections in Boston, and formulate a long-term strategic plan for the firm’s real estate needs. At issue was whether to “do nothing” and stay within the current space, or swap existing space on the lower floors of the building for a contiguous block of space on the upper floors. The company had adequate space to accommodate new hires in the short term, but was concerned about future needs given their plans for head count expansion.

Action Taken

Through a collaborative process with the finance team Columbia Group evaluated head count, department space utilization, floor plans, efficiencies, and created a sensitivity model to show a range of space needs over the term of the lease, then created various scenarios with accompanying strategies, and quantified the cost of each. The building vacancy was reclassified into two separate markets with distinctly different market characteristics, with the lower floors in the category of Class B space. Columbia Group then set the data in the context of historic vacancies and rent rates for these separate markets, included current and projected trends, and provided a list of recommendations. The analysis allowed the firm to evaluate its space decision and the implications within the context of the life cycle of the lease. The firm’s management team used the analysis to build consensus around a course of action.

Outcome

Columbia Group procured additional space in the building for Natixis, so that over time the firm will occupy and control a contiguous block on all the upper floors. This outcome integrates the floors, provides programming flexibility, accommodates growth, and offers image, views, and strong corporate identity.