PLANO, TX-Network Engines Inc. has inked an early lease renewal and restructuring for 82,880 square feet at Plano Tech Center.
The deal is a 34% reduction over its previous rental rate, according to Trace Elrod of Jackson Cooksey. He represented Network Engines in the lease negotiations, while the landlord, Bay Pacific Phoenix Corporate Center, was represented by Henry Knapek and Emily Candee of Transwestern’s Dallas office.
Network Engines provides platforms, appliances and support services for application software developers, security and communications markets worldwide. The Plano site, located at 3501 E. Plano Pkwy., serves as the company's development center.
The cumulative base rent under the new lease totals more than $4.3 million, according to Network Engines’ SEC filings. The company is responsible for the payment of additional rent items, which include property taxes, utilities, insurance premiums, common area costs, and maintenance costs.
The initial term under the lease became effective on February 1, 2010 and expires July 31, 2017. As a result, certain future base rent payments have been reduced in the lease to compensate the company for the higher base rents it paid under its previous lease.
Elrod tells GlobeSt.com the Canton, MA-based company’s lease was set to expire in July 2011. He and Network Engines first approached the landlord and the City of Plano about incentives last November. “We went to the City and the landlord to give them the opportunity to keep us out of the market [from looking around at other space],” he says. “The City immediately responded to us, and the landlord was willing to enter into negotiations.”
Because of the company’s desire to reduce its rental basis – which was significantly above market, according to Elrod – the lease negotiation process was “long and painful”, he says.
As part of the deal with the City of Plano, Network Engines received a retention package based on the number of employees and the company’s willingness to designate its Plano site as its main manufacturing facility, promising that any future expansion in the manufacturing would occur in Plano instead of its headquarters location, Elrod says.
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