Lease Restructuring

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The relationship between landlord and tenant on a property is dynamic. The ‘balance of power’ is continually changing – the parties themselves, their financial standing and the property market itself.

Occupiers have tended not to have the upper hand very often, but they have been in the ascendancy since the ‘Great Recession’, albeit a number of landlords and managing agents fail to acknowledge or recognise it.

Landlords generally strive to achieve secure an income stream on a property. Therefore, break clauses, rent reviews and lease expiries all offer the opportunity for event driven opportunities to restructure the lease. Within a five-year time horizon of such anevent they can provide potential for improvement in the occupiers position. Other more speculative opportunities can occur at various times, such as the quality of the tenant covenant, which is always an angle for enhancement, or proposed alterations to the property.

Exploring the angles to and working through the process requires an understanding of the drivers for both sides of the landlord-tenant equation.