Unlocking Value Through Lease Restructuring

July 2, 2009 - PRLog -- The current economic downturn is forcing South West businesses to cut costs and in doing so, many are negotiating improved commercial lease terms.  The commercial property agent Colliers CRE has a team that is structured to help both owners and tenants in this situation.

Commercial Lease Consultancy (formerly Landlord and Tenant) has recently been rebranded at Colliers CRE and it helps both landlords and tenants in releasing value from the leases they hold. The recent name change reflects the increasing amount of work the department is doing on surrendering, re-gearing and renegotiating commercial leases in addition to their core work of rent reviews and lease renewals.

Head of Department Nick Turk, who is based in Bristol, said: “In the current economic climate lease restructuring can be a great initiative for unlocking value for either occupiers or owners. We suggest people re-read their leases and check they are still relevant to their business needs.

“Landlords will often look at more options than they would a couple of years ago, and so if tenants have an upcoming break option or rent review, now is a good time to renegotiate. For example a tenant may have a break option in two years time which it has no intention of operating – a landlord may be interested in giving a rent free period now in return for the tenant altering the lease to remove that particular break clause.”

Mr Turk added that commercial property owners are also becoming more accommodating when it comes to paying the quarterly rent bill.

“Many large landlords are now accepting monthly rental payments, which can significantly improve cash flow and enable a tenant to better manage costs”, he said. “However landlords need to know that the tenants are financially robust before committing to more advantageous terms.

“The restructuring process should benefit commercial property owners as well -  in exchange for lower rents or further incentives, commercial tenants may sign up for longer terms providing a secure income for an extended period of time.

“In a market downturn the worst case scenario for a property owner is often that the tenant vacates leaving an empty building with a business rate liability - lease restructuring can mitigate the risk of this happening”.

Colliers CRE offers specialist advice to owners and occupiers on how lease terms affect rent – including tactical advice to maximise a clients' position in negotiations.

For further information contact Nick Turk on: +44117 917 2066 or email: nick.turk@collierscre.co.uk.

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Release Issued on behalf of Colliers CRE by Empica - for more info please go to http://www.empica.co.uk