The Gebhardt Building
2018 CBG Deal of The Year Winner
In 2017, Key Commercial Real Estate began negotiations with SSM Health represented by Broadwing Advisors to expand an existing clinic building they were leasing from a client in Fort Atkinson. The existing clinic was constructed in 2007 and consisted of 22,000 SF providing family practice, ophthalmology and optometry. The new addition was planned to be 10,000 SF and would integrate additional specialties of orthopedics, general surgery, oncology and chemotherapy infusion. The owner/developer of the clinic wanted a new 10 year lease negotiated with SSM to incorporate the existing clinic as well as the new construction portion of the project.
The cost to construct the build to suit, turnkey clinic was extremely expensive due to the proprietary and technical requirements of the use. Negotiations began in earnest in mid-2017 with every intent to have negotiations wrapped up by the end of the year to allow ample time to complete the new addition and have SSM occupying by their hard deadline. However, the lease negotiations took over a year to finally bring together construction cost and rent with a lease finally signed in July of 2018.
Google started out in Madison approximately 10 years ago with just a 5,000 SF office. They quickly outgrew it, and CBRE assisted with an expansion to 8,000, then 10,000, then 15,000, then 17,000 SF at the Constellation building, all over just a few year period from 2013-2017. With no path for future expansion, the thought of relocating to a larger contiguous space arose. As luck would have it, Gebhardt Development was starting to think about their new project, The Gebhardt Building, and casual conversations began between CBRE and Key Commercial on what could work in the new building. Google was still figuring out what they needed long term, as growth had been on a rapid upward trajectory in Madison (and everywhere else).
It was determined that they would need about 30,000 SF, nearly doubling in size again! The problem was that by this point, other tenants were shuffling into place at the new building, and leases were being signed and negotiated with others. Thanks to some quick and creative negotiations between multiple parties, Key Commercial, Gebhardt Development, CBRE, and Google, were able to work out an agreement for Google to lease the best space in the building, the top two floors – offering a top floor balcony, and Capitol and lake views. A path for future expansion was also negotiated to allow Google to stay and grow onsite, if needed. Gebhardt Development was aggressive and creative in getting this deal done quickly for the benefit of all parties.
Before Google had even touched the new space it was determined that they would want to keep their old space too, now nearly tripling in size from what they previously had at Constellation alone, and nearly 10 times larger than what they had when they first came to Madison. A new lease was quickly secured on the existing space across the street. The combined transaction was in the neighborhood of $10 Million in value, and over 45,000 SF. Google occupied the new space in the spring of 2019. Miron Construction built the building and also handled the build out for Google’s office.