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APC Commercial Real Estate AJ 2023 > Case study > Flashcards

Case study Flashcards

1
Q

How were you instructed to achieve vacant possession of Wynne St industrial estate?

A
  • regen team instructed prop man
  • manager allocated to me
  • set up case
  • researched properties/tenancies
  • arranged meeting with prop man regen managers
  • clarified instruction
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2
Q

Tell me about the Salford Rise scheme.

A

£13m Levelling Up fund
bridge, 220m tree-lined pedestrian and cycle route
over busy road
connecting Salford Uni and a new innovation zone
removed significant barrier to movement within 250-acre masterplan area
turns area into 15 min city
public realm works (2 hectares new public space)
adaptable, event space 2,300sqm: markets, open area cinema, food pop-ups, music
JV between SCC, Uni, ECF
ECF to manage design and delivery, SCC conduit for funding and oversight of programme/budget etc
iconic first step in Crescent masterplan
completion Dec 2024

outcomes:
- crime reduction
- new jobs
- new homes
- new/refurb commercial sqm across Innovation Zone
- new infrastructure
- land value uplift
- development potential
- access improvements
- perception of place improvements

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3
Q

Tell me about the Crescent development framework.

A

Crescent masterplan delivers new homes, offices, leisure space, transport hubs

6 zones:
1. Innovation district
2. Parks and river zone
- green space improvements
- pedestrian and cycle routes
3. UoS Peel Park campus
- upgraded bdgs
- new student hub, co-locate library etc.
- cultural hub
- revitalised sports centre
- “sticky campus” more commercial uses
4. Transport hub
- Salford Crescent station improvements
- metrolink stop
5. Adelphi village
- resi community
- repurpose Uni bdgs comm/social facility
- pedestrian and cycle routes
- pocket parks
6. The Crescent
- resi community
- ground floor leisure/retail
- bdgs: fire station (comm/leisure), police station (hotel)

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4
Q

Tell me about the Crescent innovation zone.

A

Salford Rise
public realm
Movement hub
commercial bdgs: robotics centre, acoustic centre
resi dev
student accom

  • collaboration between Uni and industries of future (robotics, AI)
  • working with existing businesses and start-ups, growing the economy
  • creation of jobs
  • linking in with schools and colleges to provide opps and apprenticeships
  • inspiring next generation of engineers, researchers
  • improving connectivity (Salford Rise)
  • new public spaces, resi dev and other uses (not a 9 to 5 business park)
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5
Q

What conflict of interest / money laundering checks did you carry out for the relocation of Sunrise Caribbean?

A

CoI:
Instruction:
confirmed none (Party / Own Interest / Confidential Info)

AML:
Client: unnecessary
Tenant:
- risk assessment (nature/purpose/red flags)
- standard due dil
verify ID of director and business partner (sol)
Companies House
beneficial owner
- financial info (source of funds)

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6
Q

How was Wynne St managed prior to your instruction to achieve VP?

A

I let and managed Unit 7-8
I took over management of Unit 1-4/telecoms
colleague managed Unit 5
Unit 6 vacant

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7
Q

How did you create the tenancy schedule for Wynne St with key lease details?

A

Asset man system: read leases, verified info
Debt recovery tool
Business rates arrears

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8
Q

How did you find information on Sunrise Caribbean’s business and conduct including arrears?

A

Aware of issues
Read electronic file
Discussed with colleague
Debt recovery tool/officer

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9
Q

How did you present information on Wynne St tenants to your client? How did you clarify the VP strategy?

A

Spreadsheet matrix tenancy info
Teams presentation
Advised on notices and risks, legal advice
Clarified date and relocation strategy
Advised subject to arrears and lease terms

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10
Q

What is The Salford Way strategy and how did you apply it at Wynne St?

A

Inclusive growth 2021-2024
economic inequality (lowest income areas next to high)
issues: unemployment, no/low qualifications, austerity
Tackling inequalities in Salford:
- several strategies inc Inclusive & Green Economy,
share wealth more widely across communities

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11
Q

You advised your client to relocate Sunrise Caribbean subject to arrears payment and lease terms to protect the Council. What if the tenant didn’t agree to these?

A

advise not to relocate,
tenant to find private unit,
court if tenant didn’t deliver VP (risks, legal advice)

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12
Q

How should expiry of contracted out leases be managed e.g. tenancy at will/invoicing?

A
  • stop invoicing from expiry, do not accept rent
  • write to tenant to leave by expiry
  • if tenant doesn’t deliver VP, court (legal advice)
  • may be able to claim double value s1 LTA1730
  • must give reasonable time after termination to remove goods
  • if renewing, tenant to sign tenancy at will
  • complete new lease within 6 months
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13
Q

How should works be recorded properly e.g. licence for alterations? If they aren’t, what are the implications?

A

Consent can be granted:
- automatically (by way of lease terms)
- a formal licence deed
- a simple letter licence
with necessary detail
with plans to show existing and alterations layout
(helps with reinstatement process)

Implications:
T:
- unlicensed works may be rentalised at rent review (depends on clause)
- may be tenant breach
LL:
- damage property
- not overseen by bdg surveyor
- H&S issues
- reg issues e.g. planning permission
- may affect insurance
Both:
- clarity at rent review, dilaps

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14
Q

Were Sunrise Caribbean’s works “improvements”? What are the implications of this?

A

Yes - under the Landlord and Tenant Act 1927, an improvement is an alteration that goes beyond repair, and from the tenant’s subjective point of view, improves the premises. This will be the case even if the improvement reduces the value of the landlord’s interest.

An improvement that will increase rental value? Consider using s3 LTA27 (LL can carry out works in return for increase in rent / LL must compensate T for carry out work at end of term)

If lease requires consent for alterations/improvements, LTA27 implied not to unreasonably withhold consent or delay consent

Improvements with LL consent not to be rentalised usually at rent review/lease renewal LTA54 if carried out within 21 years
(s34 LTA54)

LL may not ask to reinstate improvements at end of lease (can require only where doesn’t add to value of property)

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15
Q

How did you ascertain which fixtures and fittings belonged to the landlord and which to the tenant at 5 Wynne St? How did you deal with tenant removal?

A

Fixtures = attached to property
Fittings = chattels, not attached

LL fixtures = fixtures which are not T’s
because in situ on grant of lease /
installed or paid for by LL /
unreasonably to allow T to remove

T fixture must have been attached to premises by T e.g. trade fixtures with intention of removing it
T generally has right to remove during lease term
(must make good)
however if leaves behind become part of premises

Once lease ended, T loses right to remove fixtures
LL must give T reasonable time to remove fittings (CHECK APPLIES TO S25?)
If forfeiting, becomes involuntary bailee of goods

  • Sunrise Caribbean licence to relocate items to Unit 4 Orchard St
  • agreed e.g. partition walls could remain in situ, approved by client and bdg surveyor/demo contractor
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16
Q

How did you verify that Sunrise Caribbean employed 20 local people whose jobs may be at risk?

A

site meetings at Unit 5 Wynne St and drive-by shops

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17
Q

How did you serve a hostile s25 citing grounds B and F under s30 on Sunrise Caribbean?

A

advised client (legal advice)
instructed legal
they served by post
I served by email and hand

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18
Q

Did you advise your client to pay compensation to Sunrise Caribbean 1 x RV/for works? Why?

A

s23 LTA54 must be occupied as business
could lose compensation if vacate early
tenant to remain until expiry s25 unless agree early
but LL may still challenge
SCC wanted to challenge, none paid

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19
Q

Do you have to pay compensation on no fault grounds under s25 if a tenant is in arrears, such as Sunrise Caribbean? (NEED ANSWER)

A

Not sure, legal advice, imagine yes

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20
Q

How and why did you serve notice on Sunrise Caribbean without prejudice to claim the lease was contracted out? Is this ethical?

A
  • prop man manager advice
  • argument that parties agreed to contract out, lease expired 2020, T was in approx 2 years arrears
    (although had continued to invoice and accept some payments, no real renewal negotiations, no TaW)
  • legal advice
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21
Q

Did Sunrise Caribbean claim to have a business lease? What if they had applied to court for a new tenancy under s29?

A

No, although were aware they could through sol

SCC likely successful ground F as had planning permission to demolish and construct Salford Rise, had funding, masterplan, dev partner

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22
Q

Why was notice only served on Sunrise Caribbean in June when the instruction to achieve VP began in March?

A

March:
- reviewed info
- site visit
- presented advice to client
- wrote to Unit 1-4 to vacate

April:
- client approval to instruct sols Units 7-8 and 5
- instructed Legal, issues with service
- met with tenants
- negotiations to relocate Unit 7-8
- list of private units for Unit 5

May:
- escalated, Teams meeting with Legal manager

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23
Q

How did you manage the risk of conflict of interest when giving the list of private units to Sunrise Caribbean?

A

made very clear verbally and in writing several times

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24
Q

How did Unit 4 Orchard St become available?

A

Forfeited lease due to non-payment of rent
Decision on own terms
Tenant insolvent, to be wound up

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25
Q

There are items in the photo of Unit 4 Orchard St. How did you deal with goods owned by the previous tenant? Why wasn’t the workroom picked up in the dilaps?

A

Notice of forfeiture to reg office, email, on property
No dilaps as T insolvent, being wound up
Nervous as no bailiff for inventory, torts notice
Took video and photo inventory
Gave access to former T to collect items
Agreed Sunrise to demolish workroom, inc in rent-free
Advised client to procure bailiff, made aware of risks

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26
Q

Did you consider relocating Sunrise Caribbean to a retail unit?

A

Yes, none available, gave idea to them

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27
Q

Leslie Hough Way business park is for “innovative uses” - how would you define this?

A

the ability to create, develop, deliver new products, services, processes

STEM, research, industries of the future (robotics, AI)

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28
Q

Unit 4 Orchard St was approx. double Unit 5 Wynne St. What information suggested the unit was affordable for Sunrise Caribbean?

A

Companies House accounts didn’t tell much
Provided business plan and email from accountant
Rang accountant to verify
Trade references

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29
Q

If your client had been in the private sector, would this have changed your approach to Sunrise Caribbean?

A

Possibly yes, not same social value drivers, unlikely to have inclusive economic growth policy, depends on client requirements

30
Q

How did you conduct the inspection of Unit 4 Orchard St? inc site notes, construction, location

A

Familiar with property
Researched:
- size
- condition when let
- EPC
- stat comp:
asbestos register (ACM in roof)
T didn’t have up-to-date certs

Risk assessment:
- unit not occupied for some time
- used as bakery, risk of pests
- fixed wire test, shutter service, legionella needed
(do not touch electrics, shutter, water)
- took apprentice

Site notes:
- property, time, attendees, weather
- reviewed risk assessment, noted H&S issues
- location:
access
proximity to motorways, Uni, Manchester
within estate, mix of uses
- construction:
portal-framed unit, 1980s
brick and metal cladding
profile metal sheet roof (poor condition)
roller shutter door
- internal:
T goods, workroom (video inventory)
layout inc office / store / WC
services (electricity 3 phase, water, no gas)
fuses missing

31
Q

How did you measure Unit 4 Orchard St?

A

Laser, calibrated

GIA (measure to internal face of perimeter walls)
- inc internal partitions, WCs, stores
- no mezzanine
2,390sqft / 728sqm

Eaves height (from floor to lowest point of roof)
6m / 20ft

32
Q

What would you have done if you couldn’t get the fuses replaced at Unit 4 Orchard St in time to relocate Sunrise Caribbean?

A

Escalated to utility company (complaint)
ENW
bdg/M&E surveyor
see if T could provide solution (if safe)

33
Q

What statutory compliance documentation was needed for Unit 4 Orchard St?

A

fixed wire
asbestos register
roller shutter service
legionella, flush and disinfect

34
Q

What would you have done if Unit 4 Orchard St didn’t have a valid EPC?

A

obtain one prior to letting!
E or above or exemption

35
Q

How did you manage Unit 4 Orchard St as a vacant property?

A

biweekly inspections for insurance purposes
fuses removed so electricity didn’t need switch off
arranged stat comp inc:
- water flush and disinfect
- fixed wire test remedials
- shutter service

36
Q

What are the implications of business rates on vacant properties?

A

You do not have to pay business rates on empty buildings for 3 months. After this time, most businesses must pay full business rates.

Some properties can get extended empty property relief:
- industrial premises (for example warehouses) are exempt for a further 3 months
- listed buildings - until they’re reoccupied
- buildings with a rateable value under £2,900 - until they’re reoccupied
- properties owned by charities - only if the property’s next use will be mostly for charitable purposes
- community amateur sports clubs buildings - only if the next use will be mostly as a sports club

37
Q

How did you write the valuation report for Unit 4 Orchard St? Was it a Red Book valuation? Did you comply with the RICS guidance on comparable evidence?

A

Internal purposes, for negotiations, not Red Book but followed as best practice

Valuation:
PS1 & PS2 standards & ethics
- competent
- Red Book?
- independence, integrity, objectivity
- Rules of Conduct
- Conflict of Interest
VPS1 ToE not necessary
VPS 2 inspections & investigations
- recorded inspection notes
- recorded investigations e.g. comps
VPS 3 reports
a) ID of valuer
b) ID of client
c) Purpose of val
d) ID of asset
e) Bases of val
f) Val date
g) Extent of investigation
h) Nature and source of info to rely on
i) Assumptions
l) Val approach and reasoning
m) Amount of vals
n) Date of val report
o) Commentary on any material uncertainty
VPS 4 bases of value, assumptions
- market rent
- equitable value
(the estimated price for the transfer of an asset or liability between identified knowledgeable and willing parties that reflects the respective interests of those parties)
VPS 5 val methods
- comparable method
VPGA8 real property

Comparables:
- market evidence
inc direct transactional evidence, asking prices
- hierarchy of evidence
Cat A direct comps
Contemporary, completed transactions of near-identical / similar properties for which full and accurate information is available
Similar real estate being marketed where offers may have been made but a binding contract has not been completed
Cat B general market data
Info from commercial databases
Demand/supply data for rent
- analysis of evidence
1. established common measurement
2. analysed comp data to provide meaningful comp evidence

38
Q

Why do the Council have lease terms of 3 or 6 years? Why not 5 years or 10? Have you advised this is not the market norm?

A

commercial leases generally up to 25 years
5 / 10 standard
but trend for shorter leases
SCC tenants tend to be small businesses
flexibility, risk

39
Q

Why did you advise that the lease of Unit 4 Orchard St should be contracted out, contain a rolling break, a personal guarantor and deposit? Was this in line with the Code for leasing business premises?

A

Negotiations & HoTs:
- constructive and collaborative manner
- negotiate letting terms with fair balance with regard to respective commercial interests
- party unrepresented must make aware existence of Code and recommend pro advice

  • HoTs subject to contract, inc:
    if contracted out
    options for renewal, breaks
    guarantor/rent deposit

Rent deposits, guarantees
- deposit amount, time held, how returned
- whether security for rent or all T obligations
- in line with “Client money handling”

Alienation:
- allow T to sublet/assign whole subject to consent (not to be unreasonably withheld or delayed)
- allow corporate tenants to share premises with other companies in same group
- allow T’s to grant a bank a charge without consent
- state if LL requires assigning T to provide AGA;
any existing G is to guarantee the assigning T complies with AGA and/or the assignee is to procure a new G and/or rent deposit

Code for leasing business premises:
HoTs:
rights to make alterations, reinstatement obligations
initial alterations or fit-out (if known)

Use, alterations:
- except where HoTs state reinstatement, lease should allow T to leave alterations unless reasonable to require removal
- LL’s should have no more control than necessary to protect value of their property

40
Q

How would you have advised Sunrise Caribbean if you were acting for the tenant?

A
  • negotiations constructive and collaborative
  • pay arrears
  • argue business tenancy
  • don’t move out until expiry of s25 and claim 1 x RV compensation (£7,300)
  • agree fixtures/reinstatement
  • work with Council on relocation
  • seek private unit
  • 4 Orchard lease long term, within LTA54, longer break, consent for alterations within lease (no fees) but not as obligation of lease, no guarantor
  • seek pro advice on works
  • complete lease asap
41
Q

How did you write heads of terms for Unit 4 Orchard St?

A

Negotiations & HoTs:
- constructive and collaborative manner
- negotiate letting terms with fair balance with regard to respective commercial interests
- party unrepresented must make aware existence of Code and recommend pro advice

  • HoTs subject to contract, inc:
    ID, extent of premises
    rights to be granted e.g. service yard (CHECK)
    length of term, contracted out
    break
    guarantor/rent deposit
    rent amount, frequency of payment, exc business rates
    VAT
    rent-free
    rent reviews frequency, basis
    service charge/insurance liabilities
    rights to assign, sublet, charge, share premises
    repairs
    permitted use
    rights to make alterations, reinstatement obligations
    initial alterations or fit-out (if known)
    conditions of the letting e.g. subject to formal SCC approval/planning permission
42
Q

Why did you give Sunrise Caribbean information on service charge, insurance and business rates of Unit 4 Orchard St? How did these compare with the market?

A

Code for leasing business premises:
HoTs:

Business rates
- if inc in rent

Service charge, other costs
- indicate range of main services
- provide estimates service charge and insurance
- disclose known irregular events impact on SC
- in line with “S/C in commercial property”

Insurance, damage
- LL to provide details of insurance on request
- either party to terminate unless LL agrees to rebuild at own cost (uninsured risk)/damage not reinstated within set period i.e. rent suspension period
- rent suspension to apply if premises damaged by insured risk or uninsured risk, unless act of T

43
Q

Why did you agree to change the lease to Sunrise Caribbean from 3 years to 10 years? This is a big jump!

A

Code for leasing business premises:
Negotiations & HoTs:
- constructive and collaborative manner
- negotiate letting terms with fair balance with regard to respective commercial interests

44
Q

How did you ensure Sunrise Caribbean’s deposit for Unit 4 Orchard St was held in line with RICS requirements?

A

SCC doesn’t have capacity to set up different bank accounts, instead hold money under separate code clearly defined in accounts and do not touch

45
Q

Talk me through your terms for the licence for alterations for Unit 4 Orchard St? What if the tenant did not meet these requirements?

A

works spec
plans
H&S, planning, bdgs regs etc.
environmental health/Primary Authority
reinstatement if required (fair in case not re-letting to food business)

if T didn’t provide info/liaise with relevant authorities,
advise not to complete licence for alterations,
any works not with consent,
implications e.g. serve s146/break notice

46
Q

How did you liaise with your client’s building surveyor on works at Unit 4 Orchard St? What if the tenant did not meet the required standards?

A

bdg surveyor manager advised no input needed,
in T’s interest to complete to good standard,
oversight by Enviro Health officer

if didn’t meet:
- dialogue, with bdg surveyor input
- serve s146 notice
- serve break notice
- draw down deposit
- pursue director guarantor if damages exceed

47
Q

Why did you advise your client on a licence for alterations for Unit 4 Orchard St rather than under the lease or an agreement for lease?

A
  • separate document for clarity
  • fairness:
    felt unfair not to offer any security of tenure, given T investment, and the fact that T was moving from business lease to contracted out lease and not claiming compensation;
    if obligation of lease/agreement for lease, could have been rentalised
  • scope of competence:
    danger of acting outside, as no bdg surveyor oversight, judgement as to if/when lease could complete
48
Q

How did you manage vacant possession of Unit 5 Wynne St? What if the tenant didn’t remove all items?

A
  • spirit of cooperation while protecting client
  • regular dialogue with T, bdg surveyor overseeing demo, developer with regards to timescales
  • ended up granting licence to access post-expiry of s25 to relocate items to new unit due to delays in fit-out works
  • if items left, liaise with bdg surveyor/demo contractor on clearance, with legal advice, potential to recharge costs to T
49
Q

What if Sunrise Caribbean needed more time to vacate Unit 5 Wynne St? Would you have applied charges?

A

Ended up granting licence to access post-expiry of s25 to relocate items to new unit due to delays in fit-out works.

Period of days, wasn’t worth completing new contracted out lease (made client aware of risks and mitigated by clearly stating in HoTs for licence that lease had ended).

Didn’t use letter to extend s25 court application period as considered client’s best interest to put an end to poss.

Didn’t apply charges so as to not risk argument that lease had continued.

50
Q

What if the lease wasn’t completed for Unit 4 Orchard St before VP was required for Unit 5 Wynne St?

A

It wasn’t!

Granted tenancy at will with lease completion very close after.
Delays due to issues with legal department service.
Advised client on risks, such as retaining responsibility for repairs/lease not completed within 6 months.
Advised T works carried out at own risk as licence for alterations hadn’t completed either.

51
Q

How would you have handled repairs required for Unit 4 Orchard St?

A

Seek advice from bdg surveyor.

Pre-letting, advised LL to carry out or negotiate for T to carry out, potentially longer rent-free.

During TaW, advised LL responsible - this happened with roof leak. Realistic with T on state of roof. Complete lease asap.

52
Q

How would you handle practical tasks e.g. legionella tests and fuses in future? How would you deal with delays? How would you liaise more proactively with e.g. building surveyors?

A

Use checklist/schedule.
Diarise regular reminders to chase up.
Stress importance of case, why matters, risks to SCC.
Escalate where necessary, raise with client.

53
Q

How would you handle liaison with environmental health on lettings for food businesses in future? How would you make clear this is the tenant’s responsibility?

A

Remind T responsibility, clear in writing and verbally.

Contact EH officer directly, explain case/risks to SCC.

Suggested Concerto feature to inform EH of food business lettings, being looked at.

54
Q

How would you ensure your client’s solicitor serve notice earlier in future, based on your experiences with Sunrise Caribbean?

A

Instruct earlier (in control of this).

Difficult as already did:
- diarise regular reminders
- explain importance of case/risks to SCC
- escalate to legal/prop man managers/client
- advised risks to SCC of poor service in general

55
Q

How would you progress lettings quicker in future, based on your experiences with Sunrise Caribbean? How would you handle protracted negotiations.

A

Could have acted more quickly on forfeiting 4 Orchard
Could have had bailiff in place to manage goods etc.
Valuation/HoTs quicker (still need diligence and approval)
Agree realistic deadlines, consequences of not meeting

56
Q

What are the pros and cons of 1 surveyor managing an estate?

A

Specialisms/expertise.
Take ownership.
Relationships with tenants.
Understand big picture.
Efficiencies e.g. inspections.

If on leave/sick (mitigate by having processes in place to update records).
Surveyors may develop less broad experience.
Multiple heads can be better than one.
If everyone responsible, noone is.

57
Q

How would you make yourself aware of other tenancies on a multi-managed estate?

A

Easier with Concerto, download tenancy schedule
Read verified lease data/lease agreements etc.
Discuss with colleagues

58
Q

How would you raise prop man issues, especially within regen areas not being actively managed, based on your experiences with Sunrise Caribbean?

A

Discuss with colleague, accurate picture
Escalate where necessary i.e. manager/regen
Clear advice on risks (e.g. business rights/compo)

59
Q

What recommendations would you make on interim management of properties within a regen area? How would you work better with the regen team?

A

Interim management strategy, agreed by both teams.

Clear picture of estate, tenancy schedule with advice on achieving VP.

Liaise with developer on timescales, adapt as needed.

Tenant relationships, honest dialogue.

Lettings:
Ideally contract out new leases, inc breaks.
Manage contracted out renewals intensively (stop invoicing, tenancy at will, proactive negotiations).
Opportunities to re-gear.
Opportunities to achieve early VP e.g. breaks, tenant breaches.
Opportunities to relocate, decant strategy.

60
Q

How have you applied lessons learnt from your case study to Leslie Hough Way?

A

Interim management strategy, agreed by prop man and regen.

Good grasp of estate, tenancy schedule with advice on achieving VP.

Regular meetings with developer, adapt as needed e.g. timescales.

Tenant relationships, honest dialogue.

Lettings:
- formalise occupations where no lease in place
- opportunities to re-gear e.g. downsizing
- opportunities to relocate, decant strategy
- aim to contract out new leases, inc breaks
- manage contracted out renewals intensively (stop

61
Q

Talk me through the lease plan of Unit 4 Orchard St?

A

Property edged red
Estate edged blue
Service yard hatched black
Landscaping coloured green
1:250 standard

62
Q

Talk me through the location plan of Wynne St/Orchard St?

A

Arrows show Orchard St green, Wynne St red
Key for colours
Shows proximity to each other/Uni/Manchester

63
Q

Talk me through the comparable evidence table for Unit 4 Orchard St.

A

Basic matrix:
Date order (could have put in relevance order)
Address
Location
SCC/private (CoStar, verified private agents)
sqft (CoStar in sqft)
Rent psf
Rent type
(agreed = not completed,
achieved = completed,
effective = completed minus rent incentive)
Deal type (new more relevant)
Location
Condition
Use (Light ind/Ind)
Repair (FRI, would have adjusted for IRI)
Break
Term (years, contracted out/licence)
Rent-free
Lease status
- Could have included additional info e.g. tenant (redacted for APC), sustainability (less relevant for poor quality industrial units), photos

Valuation commentary:
5 Orchard - placed most weight on adjacent open market letting as most similar location and condition, market rent, most recent completed agreement
3 years, not contracted out (mistake), deposit and guarantor as new business, B2 B8, half the size, end terrace (security/repairs?)
6 Muslin - didn’t go out at £6.67psf as site compound
Didn’t visit private comps but did look at photos/Google maps and discuss with agents
Julia St - £5.74psf let on 1 year licence Christmas Decorators, central Manchester
Eton Hill Rd - £8.31psf, inferior location (Bury, not Manchester), superior condition (profile sheet metal, recently painted, larger eaves height), 4 year business tenancy with 2 year T break, health tech company?
Globe Ind Est - £6.92psf, inferior location (Bury, not Manchester), similar condition, 4 year business tenancy with 2 year T break, T manufacturer plastics

64
Q

Why did you serve HoTs for Unit 4 Orchard St without prejudice and subject to contract? What are the implications of without prejudice?

A

Subject to contract so no confusion not agreement itself

HoTs arguably aiming to settle potential disputes around termination of 5 Wynne and arrears (earlier versions subject to arrears payments)

“Without prejudice” where intention to render contents inadmissible as evidence in court. Form of privilege enabling genuine and open dialogue between parties attempting to settle disputes. Doc must either contain a settlement offer or form part of a course of correspondence intended to assist parties to reach a settlement of a dispute.

65
Q

Why didn’t you issue separate HoTs for the lease and licence for alterations for Unit 4 Orchard St?

A

Separate docs for clarity, but wanted T to understand relationship between 2 i.e. lease subject to works to good standard and reinstatement

66
Q

Why are some terms in the HoTs for Unit 4 Orchard St in a “general conditions” section e.g. alterations?

A

Standard industrial HoTs template, but changed my approach since as think clearer to set out in own headings, save “general conditions” for sol terms

67
Q

What is the difference between a statutory and a simple dec? Why did you state that Unit 4 Orchard St tenant must swear a stat dec?

A

Stat dec less than 14 days’ notice, must swear sol
Simple dec more than 14 days’ notice, can sign by self (and if already in possession)

Wanted T to have to engage sol around dec to make sure understood (in case didn’t instruct sol to deal with lease)

68
Q

Why did your case study take so long? March 2022 to Feb 2023

A

March 2022:
- reviewed info
- site visit
- presented advice to client
- wrote to Unit 1-4 to vacate

April:
- client approval to instruct sols Units 7-8 and 5
- instructed Legal, issues with service
- met with tenants
- negotiations to relocate Unit 7-8
- list of private units for Unit 5

May:
- escalated, Teams meeting with Legal manager
- Unit 4 Orchard St insolvent

June:
- s25 notice served
- liaised with 4 Orchard, tenant, legal, debt recovery

August:
- Unit 4 Orchard St forfeiture
- inspection, valuation, HoTs, client approval
- stat comp

September:
- negotiations with tenant

October:
- HoTs agreed, client approval, instructed legal
- EHO liaison

November:
- liaised with legal

December:
- tenancy at will
- licence for 5 Wynne St access Jan-Feb
- 4 Orchard roof repairs
- lease completion

Jan 2023:
- liaised with T, bdg surveyor on removing items

Feb:
- VP achieved

69
Q

How did you check Sunrise Caribbean’s covenant strength?

A
70
Q

What advice did you give to your client in relation to the EPC E rating of Unit 4 Orchard St?

A
71
Q

Why did you advise your client on Unit 4 Orchard St lack of security of tenure when you state that this estate is not anticipated to be redeveloped in the near future?

A
72
Q

“agreed/achieved/effective” rents – what is the difference between these and how do you devalue a headline rent in line with rent free?

A

APC Commercial Real Estate AJ 2023 (20 decks)

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