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Lease re-gear

Lease re-gear case study

MAPC were initially contacted by a long-standing client to assist in the renegotiation of a lease contract over an office building. At the same time as the lease was being re-geared, our clients agreed to form a joint venture business with one of their partners to allow them to deliver a particular contract.

The result of the JV business establishment meant the original office upon which we had been instructed to re-gear the lease became surplus to requirements, meaning we were now engaged in a lease surrender negotiation. However, at the same time, the original business needed a smaller office, which we were instructed to procure. In addition, the JV business also needed accommodation and MAPC were also asked to procure that space. However, the lease for the JV business needed to reflect the contract terms they agreed on the delivery of their own contract, which produced an unusual property lease.

Each of the offices required and the one surplus to requirements were all on the same business park, owned by the same landlord, with MAPC dealing with the lease surrender of the existing unit, where dilapidation advice was required. MAPC hired a trusted building surveyor to assess the potential dilapidation claim, contest and then settle the claim, whilst we also negotiated an exit package with the landlord. Two new leases were agreed for the JV business and also our original client.

The initial instruction was relatively simple but quickly turned into a complex series of negotiations around surrender and lease acquisition, but the rental rates required verification to ensure our client was agreeing a market rent and incentive package. The verification process involved a search of the market, viewing alternative spaces, obtaining proposals on short-listed options, and negotiating with other landlords to ensure we could prove value on the terms we were agreeing on the preferred buildings, but also had a fallback position should those negotiations falter and we needed to relocate to a different location.

The client secured multiple savings in terms of rent-free incentives, reduced rental rates on the acquired space and a satisfactory surrender negotiation and resolution of a terminal dilapidation claim for the property being relinquished.



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