An interesting article in the FT at the weekend exploring the pressure points on commercial landlords and commercial tenants and the options available for those that are facing financial pressures.
The high street was under fire before the impact of COVID-19, but over the last 12 months we have seen sector-wide issues on the high street and commercial offices.
We have found that through the process of regearing a lease, we can reach amicable and innovative solutions which can be can be advantageous to both tenants and landlords.
Regearing a lease is the process of renegotiating your lease terms during the course of the lease.
During this process, all options are on the table, including rent-free periods, an extension of the lease for a lower guaranteed rent, capital sums towards the refurbishment of a property, removing break clauses, the write off of arrears, or arrears added onto the remaining lifetime of the lease.
Regearing has advantages for both parties from increasing cash flow, security of rent, increasing the investment value of the landlord's asset in advance of a sale or refinance and a steady occupier.
At the end of June the moratorium on evictions is lifted and landlords can start evictions and winding up proceedings against tenants in default.
We suggest that the parties do not leave it until then and start engaging in the process now.
FT Article in
https://www.ft.com/content/dc6b2802-6e63-41c1-bc6a-19ab4061b646#comments-anchor
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