04. Class A Office Building - Philadelphia, PA
'Cost Plus' versus a 'Per Square Foot' Approach
Savings: 32.3% on average annually or $1,483,224 over 3 Years.
Value Created: $8,300,000
*Based on a 7% Market Cap Rate
The Story: The seasoned management team had a good relationship with the incumbent janitorial provider who was also servicing the building and tenants. However, the building had a loss of occupancy, which created an opportunity.
The goal of efficiency was lost to a contract based on time and material, with no square foot cost in place and no vacancy credit to assist with incoming tenants. We rebid using a different methodology and created tremendous savings for the asset, a benefit for years to come.