Forrester Research restructures headquarters lease

Forrester Research , Inc. (NASDAQ:FORR), a market research company with a market capitalization of $173.49 million, has entered into a new lease agreement and amended its existing lease for its principal headquarters at 60 Acorn Park Drive, Cambridge, Massachusetts. The information, sourced from an SEC filing, indicates a strategic restructuring of the company’s physical office space. According to InvestingPro analysis, the company maintains a strong balance sheet with more cash than debt, suggesting financial flexibility for such strategic moves.

On Monday, Forrester Research finalized two significant real estate transactions with LS 200 CDP, LLC. The first is a lease amendment that alters the terms of their original 2009 lease. The second is a new lease agreement that sets the stage for the company’s continued occupancy of a portion of the premises.

The lease amendment includes an early termination of the original lease for the fourth through sixth floors, collectively known as the Extension Space, as of December 31, 2025. Following this, a new lease will commence on January 1, 2026, for a period of thirteen and a half years, ending June 30, 2039. Forrester has the option to extend the lease for two additional ten-year terms.

For this Extension Space, the monthly base rent is set to start at $349,929 from July 1, 2026, until February 28, 2027, and will then decrease to $290,786 for the following year. Subsequent annual increases are scheduled, culminating in a monthly rent of $402,516 by the end of the term. Additionally, the company will benefit from a six-month rent abatement starting January 1, 2026, and a tenant improvement allowance of over $17 million.

The agreement also outlines an early termination option for the first through third floors, referred to as the Give Back Space, which can be exercised by December 31, 2025, with the possibility of deferral to May 31, 2026. Starting from July 1, 2025, Forrester will receive a rent abatement for the Give Back Space.

These lease arrangements create new financial obligations for Forrester Research, as detailed in the SEC filing. The company’s decision to restructure its headquarters lease reflects a reevaluation of its space requirements and financial commitments. With a current ratio of 0.99 and impressive gross profit margins of 57.79%, Forrester appears positioned to manage these new obligations effectively.

This move is part of Forrester’s strategic planning regarding their office space utilization and financial management. The full text of the Lease Amendment and the New Lease are included as exhibits to the SEC filing, providing a comprehensive view of the new and modified terms agreed upon by Forrester Research and the landlord. While the company’s stock currently trades at $9.25, InvestingPro analysis suggests the stock is undervalued, with analysts expecting net income growth in the coming year. For deeper insights into Forrester’s financial health and detailed valuation metrics, explore the comprehensive Pro Research Report available on InvestingPro, covering this and 1,400+ other US equities.

In other recent news, Forrester Research Inc. reported its fourth-quarter 2024 earnings, which exceeded analyst expectations with an earnings per share (EPS) of $0.36, compared to the projected $0.31. Despite this positive earnings surprise, the company’s full-year revenue for 2024 declined by 10% to $432.5 million, and it anticipates a further revenue decline of 4-8% in 2025. The company has introduced innovative products, such as IZOLA, a generative AI tool, to enhance its offerings. However, the broader downturn in revenue and a cautious outlook for 2025 have overshadowed the earnings beat. Forrester has taken steps to align its cost structure with expected revenue, including a 6% reduction in workforce. The company aims to focus on improving retention, driving growth, and boosting its events business in 2025. Additionally, Forrester has been transitioning away from smaller tech vendors to focus on larger corporate clients, which has been a strategic shift in its business model.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.