Case Studies: Macromedia — $32 Million Saved!
When Macromedia Inc., a San Francisco-based Internet software company, acquired Allaire Corp. in 2001, it also assumed the
348,000-square-foot, 10-year lease in Newton, Mass., that Allaire had signed at the peak of the real estate market.
Soon after the Allaire acquisition, plenty of quality space came on the market and rents dropped. Macromedia was suddenly faced with a major real estate and operating headache: the company needed a third of the space due to functional relocation to San Francisco, the firm was locked into above market rents and the Landlord terminating the lease was not an option. It was locked in a10-year lease.
James Morgensen, Vice President of Real Estate for Macromedia, turned to T3 Advisors for strategic advice. The T3 team analyzed the market, got the Landlord (Equity Office Properties) involved, and began scouting for creditworthy tenants that would sublease the excess Macromedia space.
Within one year, T3 Advisors President Roy Hirshland and Managing Director Mark Cote secured sub-tenants McKesson HBOC
(85,000 sf), UnitedHealthcare Corp. (26,000 sf), and Rocket Software (47,000 sf), among others.
"These deals represented about a $32 million savings to Macromedia, and obviously, in this day and age of corporate
cost-cutting, it represented a great win for Macromedia," said Hirshland.
Added Macromedia's Mr. Morgensen: "More importantly, we are now recouping about two-third of what we are paying.
T3 did a phenomenal job. We never expected what T3 delivered to us."
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