A Lease Regear replaces one lease with a new one, on renegotiated terms. Landlord or Tenant are free to do this at any time which may be desirable when the parties' commercial goals may have altered in recent years. However, mutual gain is at the heart of any lease re-gear or restructuring, with neither party obliged to conclude a transaction, therefore a sophisticated approach is needed.
Advantages for a Landlord include :
- enhancing the capital value of the property. This can be achieved a number of ways, for example by the removal of tenant break options
- pre-emptive regearing of leases close to expiry may preserve investment value particularly in anticipation of a sale or financing
- securing occupier levels will mitigate costly service charge and rates voids
The advantages for a tenant include:
- the opportunity to revisit lease terms which were agreed in a more buoyant market
- capital payments, rent free periods or reduced rents may be offered in return for extended lease terms or the removal of break options
- the opportunity to renegotiate every aspect of the lease including terms on assignment, subletting, rent review clauses, break dates
Once the terms are agreed there are typically two way to complete the process – either by the issue of a new lease of by varying the existing lease.
For any more information please ring our office on 0113 286 7006 or use our contact form.