GGA Logo space

page header

Real Estate Strategy for Office Space Needed by the California Medical Association
Client: The California Medical Association
dashed line separator The California Medical Association (CMA) has long had its headquarters in San Francisco, California. In 1992, the CMA leased 62,399 square feet of space in two stories of an office building in the Financial District South area of San Francisco. The CMA engaged Gruen Gruen + Associates (GG+A) to identify and evaluate the options available to the CMA in the future so as to define a real estate strategy. A major question asked by the CMA was: should the CMA headquarter space be leased or purchased?

GG+A evaluated the expense history of the space leased by CMA and reviewed the existing lease. Meetings were held with the landlord in order to renegotiate that lease in order to provide present and future space for the CMA at a minimum of cost. The likely future demand for space and rents in San Francisco were forecast and the costs associated with alternative purchase options estimated. Cash flows were prepared that forecast the net occupancy cost to the CMA, including residual value for purchase options, under 9 alternatives.

The alternatives were evaluated and recommendations made to the CMA as to a strategy that would minimize their costs and maximize their flexibility with regard to the future use of office space. Suggestions were also made about the type of financial arrangements under which the CMA could hedge against possible changes in the market conditions that would influence their long-run costs.

These recommendations were presented and accepted by the CMA's Building Committee chaired by Dr. Richard F. Corlin.

dashed line separator

Content Copyright © GRUEN GRUEN + ASSOCIATES. All Rights Reserved.
{ site map }