Stamford Advocate
Signage rights playing a part in landlord-tenant negotiations
Prevalent in Stamford: Companies like I-95 location to set their flag
By: Richard Lee
Companies have advertised their products and services on billboards along America's roadsides for as long as people can remember, and they have proudly posted their names atop their headquarters buildings, but now placing a corporate name on a building where a company is renting space can be a key factor when negotiating a lease with a landlord.
When a company is considering locating an operation in a building along Interstate 95, particularly in Stamford, naming rights is often a topic of conversation.
The highway, one of the busiest in the nation, provides a great opportunity for a company to put its name out in front of consumers or potential corporate clients.
"You can see the visual impact it has. The impression is being made," said Gerald Cavallo, Ph.D., associate professor of marketing at Fairfield University. "It identifies a building and is a marketing billboard for people who pass by."
It also demonstrates to a passerby the company's commitment to the community and could be an employee recruiting tool, he said.
Legg Mason, Elizabeth Arden, Thomson Reuters and Ernst & Young all have their names emblazoned on the dark glass walls of First Stamford Place, a sprawling three-building 780,000-square-foot office complex on the south side of I-95. The signs pop out at motorists and are impossible to miss.
Jeffrey Newman, senior vice president of Empire State Realty Trust, owner of First Stamford Place, would not go into detail about the financial arrangements involving naming rights, but he said that space is reserved for well-known tenants that are leasing a large amount of space.
Negotiating naming rights was important in consummating leases with all four companies, he said.
"We bring it up in our marketing, and often the tenant or its broker may bring it up," Newman said. "It's an opportunity for a prospective tenant to impress and market their brands. It's negotiated on a case-by-case basis."
Thomson Reuters, a long-time tenant, also negotiated to place a sign atop Empire State Realty Trust's Metro Center near the Stamford Transportation Center.
"For us, the first time I recall (a sign placement) was for Thomson Reuters -- they were still known as Thomson -- more than 10 years ago, " said Newman, commenting that Empire State Realty Trust, formerly Malkin Properties, works with tenants on the size of the size, its illumination, design and other factors.
It's a pride thing
Having a sign proclaiming the presence of a company at one of Stamford's leading office complexes is important in several ways, said Francine Gingras, a spokeswoman for Florida-based Elizabeth Arden, which has 180 full-time employees in Stamford.
"Our people take great pride in seeing the sign and knowing that they are a part of it. Their families and friends see it. This is one of America's great names," she said. "It's a very strategic location. It's a great place to have your name on a building. It's a constant reminder that this iconic American company is alive and well."
A short distance to the east of First Stamford Place on the north side of I-95, the names of six corporations greet motorists as they drive past Stamford Plaza, a 990,000-square-foot, four-building office complex owned and operated by RFR Realty. Tronox, Icon International, Wiggin and Dana, Berkley Insurance, Digitas and Noble Group are all major tenants.
To qualify for a brushed-chrome sign on Stamford Plaza, a company must occupy at least one full floor, and the sign must meet RFR's standards, said Margaret Carlson, portfolio director of RFR's Stamford portfolio.
"We prefer uniformity with the signs," Carlson said, adding that potential tenants want to locate near I-95 with an identifying sign. "We believe it's one of the reasons why tenants locate to Stamford Plaza. Icon was the first about four years ago. Every deal is different."
When Tronox, a producer of titanium ore and titanium dioxide, was eyeing Stamford Plaza in 2012, it realized that the building was an ideal location for placement of its company name.
Conversation starter
"The Tronox sign was something that we asked for as part of our lease/build-out package," said company spokesman Bud Grebey. "Our lease includes language that grants us the non-exclusive right to install and operate a sign that is consistent with RFR's standards for similar signage along the south side of the building."
The sign is a conversation starter, he said, and it helps in competing with other companies for employees.
"People might not know what Tronox does, but they say that they have seen our sign. It's a great opener to tell people about the company and the work we do," Grebey said. "Tronox is a public company, traded on the New York Stock Exchange, so having our company name visible to thousands of potential investors and analysts who travel past it each day is a plus."
The sign also helps foster pride of association among Tronox's 71 full-time and contractor employees and the community, according to Grebey.
But a sign on the building was not a deal-breaker, he said, commenting that the location and its proximity to the Stamford Transportation Center and I-95 were most important, as well as RFR's willingness to build out a floor plan and meet long-term needs of Tronox, which is leasing 27,000 square feet.
First Stamford Place and Stamford Plaza are the best examples of signage rights in the region, said John Hannigan, a principal in Choyce Peterson, a Stamford commercial real estate broker.
Landlords often use signage rights as a way to attract large tenants, he said, adding that the size of the leased space, length of the lease and credit worthiness of the tenant are all factors that building owners weigh before allowing installation of a sign.
Secondary offering
"Generally, the cost of the sign is the tenant's expense," Hannigan said, but a landlord might not charge for the signage rights. "It's on a building-by-building basis. If it's a prominent name, then it helps the landlord to attract other tenants. It (signage rights) is not something landlords are leading with. It's a secondary offering."
Name recognition is essential for any company, and having a sign on a building along I-95 is often coveted by businesses, according to Josh Moritz, senior vice president of Creative Partners, a Stamford-based advertising agency.
"Given that billboards go for between $2,000 and $10,000 per month along some highways, your company name on the side of your office building is like getting free rent on a small mansion on Martha's Vineyard," he said. "With this perfect storm of long lease, high exposure and lots of frequency against the same captive audience crawling by your name day after day, you could sell corn to Iowa, pigs to New Jersey and the Red Sox to Yankee fans."
I-95 isn't the only place to put your name, either, Moritz said.
"Even on a side street in places like Stamford, Westport or Darien, putting your company name on a building for five years will build invaluable good will and exposure for the price of the lease," Moritz said.
Bridgeport, Norwalk
While Stamford has been a leader in the signage rights trend, other cities like Bridgeport and Norwalk also count landlords with major tenants that have signs to mark the presence of their offices.
The Bank of America's time-and-temperature sign atop 10 Middle St., in Bridgeport, has become a landmark for I-95 motorists, said Ernest Trefz, senior partner of the Trefz Corp., owner of the building.
"People set their clocks by it. It's helpful for travelers," he said.
Bank of America inherited its lease for the property in its merger with Fleet, said BOA spokeswoman Jennifer Darwin.
"It is a highly visible location, and we are pleased to have the opportunity to post signage there," she said.
FactSet, a market analytics and financial content provider to the financial services industry, came to the Merritt 7 complex in Norwalk in 2002 and occupies nearly 200,000 square feet in buildings 501 and 601.
"They signed a long-term lease and were granted a signage lease (for Building 601). You can see it from the Merritt Parkway and Route 7," said JoAnn McGrath, director of leasing at the 1.4-million-square-foot complex managed by Marcus Partners.
"I think it's an excellent opportunity for owner and tenant if you can get signage rights."
Choyce Peterson, Inc.
Choyce Peterson, Inc.
Choyce Peterson, Inc.
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