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Enron Mail |
Dear Officers,
Hines, the building management team, has offered to move us at no charge to space on the 36th floor of our building. The move itself will cost Hines an estimated $87,000 -- for construction of the space, moving fees, telecommunications setup and office materials. Our lease for this new space would run through May 2002 at our current rate. They will give us the option to now sign a lease extension from May 2002 to May 2005 at a base rate of no more than $20.50 per square foot. We have checked with several corporate real estate facilities departments (Enron, El Paso, Dynegy) with the general consensus reached that this is clearly a financial advantage for us. Should we not take this offer, Cinergy will assume our space at the end of our lease. We will be responsible for our own move (a considerable expense), and after the move will be responsible for a higher lease rate, assuming we stay in the downtown Houston area. In the meantime, we will be placed in the middle of Cinergy's construction on our floor. All things considered, I advise that we do agree to the move, which can be accomplished over a weekend with little disruption to our office. Please let me know if you concur or have concerns. Best Regards, Rae Subj: GISB Office Space Date: 6/23/00 To: <A HREF="mailto:shorton@enron.com"<shorton@enron.com</A<, <A HREF="mailto:hdroberts@marathonoil.com"<hdroberts@marathonoil.com</A< To: <A HREF="mailto:wpboswel@mwbb.com"<wpboswel@mwbb.com</A<, <A HREF="mailto:gisb4"<gisb4</A<, <A HREF="mailto:jhb@8760.com"<jhb@8760.com</A<, <A HREF="mailto:gisb"<gisb</A< Dear officers, We have been approached by Hines, our building landlord, asking us if we would consider moving. Cinergy -- the only other tenant on our floor, have asked for our space. Our lease runs through to April 2002, for 2455 square feet of space. Hines noted that all moving expenses (upwards of $50,000) would be covered. In addition, they indicated our lease might be extended to the end of 2004 at our current rate of $6.00 base per square foot and $8.50 add on for utilities and maintenance per square foot, for a total of $14.50 per square foot. This is an advantageous rate as it was negotiated prior to downtown becoming so populated. We confirmed with commercial real estate agents that average rates for downtown space "A Buildings" now are considerably higher, in the neighborhood of $22 to $30 per square foot and more if we were located in the Galleria area. Our building is considered an "A Building." There is other space in the building that is better laid out, and would accommodate expansion, if needed. We are still in the discussion stages -- but it looks like a financially favorable arrangement if everything can be worked out. We would be able to move over a weekend, have little or no disruption of service, maintain the same phone numbers, still be in the same building -- have more possibilities for expansion if needed, and maintain the same low rate for a longer period of time. The space they have offered is 2500 square feet but at our current monthly rental rates. We should be able to sublease the space with little difficulty, in the event a new organization comes into being and our location and office is not appropriate for the new organization. Looks like lots of advantages and very few risks. If we stay where we are, our lease runs out in April 2002 in which event we will probably be required to move and we will spend upwards of $50,000 to make such a move and be faced with higher per square foot rental costs. Meanwhile, Cinergy is planning to reconstruct our floor and our office will be in the middle of construction activity for some time. The conversations are in the early stages, and I'll keep you informed as they go. Let me know if you have any concerns with this approach. Best Regards, Rae
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