Lennox Industries: When Growth Cooled, ICON Turned Office Space into Ad Space

The Challenge

Lennox Industries is a worldwide leader in residential and commercial heating, cooling and ventilation systems.

It faced an ironic challenge: more office space than it wanted to heat, cool or ventilate for itself within its corporate headquarters campus. Unfortunately, the company had entered into a long-term lease to obtain control of the space for anticipated future growth, which was occurring slower than anticipated. It considered the obvious choice first – subleasing – to recover some of the excess overhead but found that the market price for space in its Richardson, Texas, area had fallen significantly below what it was currently paying.

How ICON Uncovered Value

Corporate barterThe creation of value by exchanging a client's unwanted or undervalued asset for the promise to purchase over a period of time from the corporate-barter company a defined set of goods and/or services, called fulfillment. (Sometimes mistakenly referred to as Corporate Trade.) offered a creative solution: ICON would sublet the excess space for the full cost of the space, plus expenses, in exchange for 5 years' worth of trade creditAn alternative currency used in the corporate barter industry; one of ICON's financial options. (Note that this term is properly used only in the singular, i.e., never trade credits.). Over the next 60 months, Lennox redeemed its credit with the purchase of media for several of the company’s product lines.

Result

The transaction worked out so well that when it was completed, Lennox entered into a similar agreement for a flex/light manufacturing facility on the other side of the country.