A commercial real estate client was purchasing a new asset, and wanted to know if it should assume the asset’s existing electricity contact.
We evaluated the existing contract and compared it against retail rates available in the marketplace. Our analytics team determined that the contract was underwater by $800,000 and recommended that the client decline to assume the current contract or negotiate a lower sale price. With the help of our expertise, our client successfully negotiated a lower sale price on the purchase, resulting in immense savings.
Then, the day after the closing, we negotiated a “blend and extend” contract adjustment with the client’s current electricity supplier. This allowed our client to lock in an additional year on the contract at a lower rate. The result totaled savings of $300,000 over the term of the deal.