SCHLUMBERGER

Client Situation

Schlumberger, a multi-billion dollar global energy services company with 77,000 employees, needed to relocate the headquarters of its basic research lab closer to academic centers of excellence in science and technology. After a worldwide search, the company focused on Boston. The company hired Columbia Group to find a site, help assemble a local team, and negotiate the business deal.

The property had to meet the following criteria:
• Easy accessibility to the scientific research community.
• Physical characteristics to accommodate a mix of unique science labs, research space and classrooms, including large horizontal floor plates of approximately an acre - an unusual footprint in an urban location.
• Occupancy within 30 months.
• Finally, senior management wanted to own its own building - in a location where there were no building sites for sale.

Action Taken

After identifying sites that fit most of the above criteria, Columbia Group worked with Schlumberger's special projects manager to assemble a team of local experts consisting of designers, engineers, project and construction managers, to conduct site evaluations. Columbia Group and Schlumberger jointly determined which physical constraints of the selection criteria were insurmountable at each candidate site; which obstacles had reasonable solutions; and which owners had interests complementary to Schlumberger's real estate goals. Working collaboratively with the client, Columbia Group then provided financial analysis of the various sites, provided quantitative models to use in negotiating the deal points, built organizational consensus on both sides of the transaction, structured the broad parameters of the business deal, and then identified and recommended a Boston-based legal firm to record the agreements.

Outcome

Schlumberger now occupies a 190,000-square-foot build-to-suit research facility at One Hampshire Street in Cambridge, Massachusetts, one block from the MIT campus. Several floors of a newly constructed building connect to an existing building to create one-acre floor plates. Draper Labs had owned the land and buildings at the site. As a condition to enter into an agreement with Schlumberger, Draper converted its ownership structure to a condominium, provided a long-term lease, and granted Schlumberger purchase rights for its portion of the property.