Challenge
Promise Academy, a charter high school sponsored by the Cleveland Metropolitan School District offering students ages 16-21 an opportunity to earn their high school diploma, was occupying a 31,000 sq. ft. space in which they had been operating out of for 15 years. The school was experiencing funding and organizational changes and needed to remedy a major real estate issue: their space was too large and their occupancy costs were too high for a charter school, presenting an insurmountable financial hurdle. Promise Academy engaged Allegro to lead them through their exclusive tenant rep process.
Solution
The charter school wanted to ensure that however their physical space changed, it would not negatively impact students, staff, or enrollment. A critical consideration was accessibility to public transportation lines, as many students utilize that transportation to commute to and from school each day.
Allegro first worked to understand how much space Promise Academy truly needed to operate efficiently and then went to market in search of options that would meet their space and operational needs. Allegro identified six options in the business district and on the east side of Cleveland, toured the Academy through those spaces, and narrowed the list down to two viable properties.
While Allegro and Promise Academy were working through this process, the owner of the school’s current building listed the property for sale. The school’s pending lease expiration greatly impacted the landlord’s ability to prove the property’s value, which in turn provided the school new negotiation leverage. Additionally, the two comparable alternative options for new locations provided market leverage as well.
Ultimately, Allegro capitalized on this leverage and assisted the client in signing a new lease with their current landlord which cut their occupancy costs in half. In return, the school gave a small portion of underutilized space back to the landlord to re-tenant in order to make the sale of the building more appealing. Promise Academy was able to remain in a facility that students and staff are comfortable in while realizing significant cost savings that can now be allocated to additional improvement efforts.
