Durham's American Tobacco Campus has inked one of its original anchor tenants to an additional seven years.
Ad agency McKinney announced this week that it has extended its lease to 2021. The company moved from downtown Raleigh to American Tobacco in 2004 and now leases 55,000 square feet in the complex.
The agency, which has hired 60 people over the last six weeks and now employs 230, was halfway through its original 10-year lease.
Joni Madison, McKinney's chief operating officer, said the agency's lease terms didn't change but it did receive other benefits that she declined to name.
“It's not necessarily in the lease, but we were able to gain things that made it worth our while to extend the lease,” Madison said.
McKinney’s extension comes at a time when office demand is waning as the recession causes companies to shrink or close. Many tenants are hunting for discounts or trying to renegotiate existing leases.
Madison said the company's American Tobacco space helps the agency compete for national clients and employees.
"If your single motivation is I've got to reduce my overhead and my leasing expense, then great," she said. "But if you feel that your space is key to your culture. Is key to your ability to attract clients, those types of things. Then you really have to look at the whole picture."
Michael Goodmon, vice president of real estate for Capitol Broadcast Company, which owns American Tobacco, said Capitol was able to retain a key tenant and ensure that McKinney’s lease wouldn’t expire at the same time as other tenants.
Goodmon said 97 percent of the 800,000 square feet of space in the entire American Tobacco Historic District is currently leased.