To manage out and dispose of a long leasehold liability part vacant and part sublet to two poor covenants.
The property had over 50 years remaining at a full rack rent, with sub-leases expiring in two years. That primary occupier had indicated they were not going to renew.
The main sub-tenant had a perception that their lease had value, whereas in reality, it was a liability because of the short term remaining and the dilapidation costs they would have to meet. Discussions with the sub-tenant led to an agreement to surrender their lease but only at the point of a new tenant being put in place.
A new tenant was identified for not only the sub-tenants space, but also for the vacant first floor. Terms were agreed with the established regional retailer for a new 10 year lease which would see the building refurbished and a significant fit out undertaken.
Previously, negotiations with the freeholder had not progressed because of the short-term on the sublease, the vacant space and the condition of the building. The restructuring, therefore, removed these impediments opening up a surrender of the property and a total release of liability for the client.