Assignment of 83 Baker Street, London, W1
The Client
Warner Music Group's business in the UK includes the discovery and signing of local artists and songwriters and the distribution, marketing and selling of recorded music and compositions from both local and international artists. WMG's international operations include a growing roster of artist services companies located in most major music markets around the world.
The Project
Marketing and disposal of 83 Baker Street, which totals just over 30,000 sq ft and was previously occupied by Warner Music Group, but then became surplus to their needs as all staff were moved to their HQ in Kensington Church Street, W8.
The Challenge
Following the WMG staff moving to their HQ in Kensington, the 30,000 sq ft over 6 floors was stripped out and cosmetically refurbished by their contractors and placed on the market. The first challenge found, was that most occupiers in the market want to take space direct from a landlord (not a tenant), fully refurbished with new lighting and air conditioning plant and with a brand new lease.
The other main challenge was that occupiers looking for 30,000 sq ft are nowadays usually looking to be over as few floors as possible, not multiple floors such as 83 Baker Street.
There was also the added challenge of reporting to the global HQ of WMG in New York and of great significance was the differences between US and UK market real estate practices.
The Solution
Alex carried out a comprehensive marketing campaign, which included the full suite of brochure and flyer production, print and internet advertising, local mailing, email campaigns, incentive schemes and a launch party amongst other things.
After many months of viewings and unacceptable offers, Alex agreed a rather complicated deal with the market leading serviced office specialist MWB Business Exchange. They wanted a lease direct from the landlord Lazari Investments, however Lazari were unwilling to lose Warner Music Group as the named tenant on the lease due to the strength of their covenant, being listed on the NYSE.
So WMG assigned their lease back to Lazari (whilst still being liable under the terms of their lease until expiry) and Lazari granted a new sub-lease to MWB until the WMG lease expired and then a reversionary lease kicked in and WMG's liability fell away.
The Benefits
All key criteria of the client's aspirations were met and although their liability didn't fall away immediately, it did at expiry of their lease when MWB's reversionary lease commenced and all 3 parties ended up with exactly what they wanted out of the deal.