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The Corporate Tenant Gamble

In the high-stakes world of corporate office space, both landlords and tenants need to know when to hold'em and when to fold'em.

By Becky Bergman | Updated on March 19, 2007

Becky Bergman is a contributor to Real Estate Southern California, from which this article was excerpted.

When it came time to renew its lease or move to a new location, Transamerica Occidental Life Insurance Co. opted to remain at the AT&T Center in Downtown Los Angeles for another 10 years. After scouting potential sites in Burbank, Glendale, Long Beach and Woodside Hills, Transamerica executives figured it would be cheaper and more convenient to re-ink a deal for 260,000 sf.

Hinted to be worth an estimated $75 million, one of the largest leases signed in the region during 2006 turned out to be a coup for the landlord, who didn’t need to go on a costly hunt for a replacement tenant. Transamerica, which didn’t have to change its letterhead, also scored big in the win-win deal by inheriting a plethora of new amenities when the 32-story tower underwent a major rehab.

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