Croftons Solicitors LLP

Lease re-gears: your flexible friend?

Tenants – feeling that your premises are over-rented or that your lease is too inflexible to meet your current and future operational needs?

Landlords – concerned that your prized tenant’s lease is soon to expire, and you fear that they will relocate, leaving you a rental void plus primary liability for business rates?

A lease re-gear could be your solution, delivering significant benefits to both landlords and tenants and particularly attractive during a period of economic downturn.

Tenants may be able to negotiate a new or varied lease, incorporating a rent holiday to ease cash flow and could achieve flexibility on exit strategies by agreeing suitable future break provisions.

Landlords have an opportunity to reduce/eliminate the future risk of a void unit. In circumstances where one of the fundamentals of investment value is linked to the duration of any occupational lease, a re-gear could work to preserve the investment value, with obvious benefits for either selling a tenanted investment or seeking to raise finance against the asset.

Why not just wait until lease expiry? Well, for tenants it is possible that deals which can be negotiated in the current market may not be on the table at lease expiry. For landlord’s a re-gear gives an opportunity to take early action to reduce or eliminate some key risks to the value of the reversion.

Have a look at a case study based on a transaction we led on and please contact Bob Agnew by calling 0161 214 6180 or completing the online form to get more information.