Case Study: Zeiss

www.zeiss.com

Carl Zeiss Vision is a worldwide leader in developing eyeglass lens designs, coatings and materials.

In 1988, Mark Levin, Vice President of Voit Real Estate Services - Cypress Food Group, represented Sola Optical Company in a 94,000 square foot lease for its Northern California offices and R&D facilities. At the time, Sola, which has since been acquired by Zeiss, was one of the largest private employers in Sonoma County, in Northern California. This first deal with Sola required buying out a lease from a tenant that had just leased space in a new 120,000 square foot building, to create the necessary continguous premises for Sola's extensive Research and Development divison. 

Eight years later, in 1996, Sola again contacted Mark, as the decision had been made to increase Sola's work force in the building by an additional 250 - 300 employees. Sola now needed the entire 120,000 square feet to accomodate its' larger workforce. Additionally, there was a requirement for the construction of an additional 27,000 square feet of office space and a commercial kitchen to feed its' employees.

Zeiss
lobby

Although the building had been sold to a publicly held REIT, Mark had maintained a listing on the part of the building that had remained unoccupied during the first seven years of Sola's lease. Mark, Sola and the management of the REIT were able to structure a new ten year lease for Sola, with a landlord contribution of more than $2,500,000 for the requried tenant improvement work. A critical aspect of the new lease was the acquisition of a ground lease, on an adjacent property that was under different ownership, to allow Sola the option to increase its employee parking spaces to accomodate projected growth to over 500 employees in the building.

In the early 2000's, Sola, began to transfer some of its operations to places where the cost of doing business was less that it was in Northern California. For Sola, these places included Mexico and China. In 2004, Mark was asked to begin subleasing space for Sola, in the building that they had now been occupying for more than fifteen years. Mark was able to structure a 67,000 square foot sublease to another one of his clients, Hydrofarm, a manufacturer of  hydroponic equipment.

By 2007, Sola's ten year lease had ended and the company had been acquired by Zeiss. On behalf of Zeiss, Cypress Realty Advisors negotiated a new lease for the 20,000 square feet of office space that was still required in the building. This lease required flexible terms, as Zeiss had other operations in southern California, in which it was planning on consolidating its operations.

Additional transactions in which Mark Levin represented Sola Optical Company during this period included the sale of a 155,000 square foot office / R&D / warehouse building, as well as the sale of a 20 acre site for a future office park. The sale of the office park land was complicated by the fact that the site had been designated a Superfund site by the Environmental Protection Agency. Over a period of many months, both a environmental remediation plan and an environmental indemnification agreement were put into place, so that Sola's goal of selling the property could be achieved.