LSG Sky Chefs, Las Colinas, Texas
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Analysis
The Amend Group has provided consulting services to Sky Chefs since 1998 in anticipation of an eventual renewal, relocation or build-to-suit for the group that has been in Arlington for ten years. In 2001, Lufthansa Airlines purchased Sky Chefs, and renamed the company LSG Sky Chefs, and the Arlington group the Americas Headquarters. In 2001, The Amend Group began assisting the new Global Headquarters of LSG Sky Chefs with their search for a new 50,000 square foot headquarters facility in the Las Colinas area. The intent at this time was to keep the Global and Americas groups separate. A decision on a new location was close to being made when the events of September 11, 2001 occurred. As a result of the terrorist attacks, LSG Sky Chefs was forced to put all facility activities on hold for several months.
In early 2002, the project was re-energized, about the same time that the Americas Headquarters decision process was begun. The Americas lease was to expire on April 30, 2003, and it was anticipated that approximately 80,000 square feet would be required. As the efforts continued to evaluate buildings in the Las Colinas area, the LSG Sky Chefs’ executive team began to internally evaluate the possibility of consolidating the two operations in one building. A number of efficiencies and combined operations would save considerable financial and human resources, and the decision was finally made to consolidate. A consolidation of this magnitude, however, created problems extending from brokerage to design concepts for the different groups, constructing the new space, timing a large move, and controlling a comprehensive solution for LSG Sky Chefs, all of which required an inventive solution from The Amend Group’s team.
LSG Sky Chefs enjoyed The Amend Group’s one–stop offering of service. Everything relating to this project was under the direction of John Amend, President of The Amend Group, assisted by Jay Ballou, Senior Vice President and Audrey Cauthen, Vice President. The Amend Group handled architecture and design, project management, general contracting and construction management, as well as brokerage services. LSG Sky Chefs’ Director of Real Estate, John Hayes, was well–pleased to have a focused solution without the administrative hassles of uncoordinated companies.
“Relying on The Amend Group’s single point of contact methodology and its integrated services platform has been invaluable to the real estate team to orchestrate our relocation,” said Hayes. Turning to The Amend Group was LSG Sky Chef’s only option for getting top–notch service in a transaction that is normally filled with headaches from the various companies involved. Instead, the client enjoyed a turnkey solution from a proven provider of real estate solutions, The Amend Group.
The overall results of the project were impressive, both operationally and economically. An 11-year lease with high-end tenant improvement dollars, an extended free-rent period, and options creating flexibility for organizational growth and/or shrinkage, created a below-market economic package. The restructuring of some internal functions in LSG Sky Chefs combined with attrition in some areas, and The Amend Group’s innovative design concepts allowed LSG Sky Chefs to reduce its space requirement from over 125,000 square feet to 106,000 square feet. This reduction created in excess of a 15% increase in efficiency for the organization, which translates to a positive impact on the bottom line of the company financials.
Project Goals
- Assist LSG Sky Chefs in determining the appropriate square footage requirement for both Global and Americas headquarters.
- Evaluate all potential location alternatives, and leverage competition to ensure best lease economics.
- Ultimately negotiate a lease that provides best value for LSG Sky Chefs, and combines the separate groups into a single location.
- Provide project design and construction services to ensure cost control and to compress schedules to minimize operational disruption and downtime, and adhere to budget.
Services Provided
- Strategic facility consulting
- Tenant brokerage
- Space programming
- Interior architecture
- Interior construction management
- Project management
- Negotiations
- Market analysis
Results Summary
- Evaluated all options within the targeted area near Dallas/Fort Worth International Airport
- Evaluated financial impact of combining Global and Americas headquarters into a single facility, and assisted LSG Sky Chefs in analyzing benefits of combining facilities
- Negotiated an 11-year Lease agreement, which included 12 months of free rent and significant tenant improvement allowance for constructing the new facility, resulting in an effective rate significantly below market
- Helped reduce projected square footage requirement from 125,000 square feet to 108,000 square feet through innovative space programming and design
- Designed state-of-the-art test kitchen and presentation room for LSG Sky Chefs customers
- Negotiated flexible expansion and contraction options, and a 2003 Base Year for Operating Expenses