L&L Flashcards
What are the factors that affect rental values and lease terms?
Location, specification, fit out, ceiling height, lease profile, market dynamics
What does the RICS Professional Statement: Code for Leasing Business Premises 2020 set out?
Mandatory professional statement. Objectives are to improve quality and fairness of negotiations on lease terms and promote new set of comprehensive HOTs to make drafting leases more efficient
What are trends in leasing market now?
Flight to quality, Cat A+, shorter leases
How can LLs make space more appealing?
Fit out, breakout space, maximising outside space
What is difference between sublease and assignment?
sublease is a third party taking an underlease and establishing a relationship with the sublessor, and an assignment is transferring all rights under the lease to a third party
What did you include on marketing particulars?
EPC, terms of lease, pictures, SC, business rates, fit out specification
What is included in l&l heads of terms?
ID / extent of the premises, special rights to be granted such as parking/data access, lenth of term, inside/outside Act, renewal options and break rights, requirements for guarantor and rent deposit, rent, frequency of payment and where inc/excl. of rates, LL charges VAT on rent or now, rent free period, service charge liability, reights to assign/sublet, repairing obligations
What was included in your interest schedule?
name of party, space interested in, requirement, agent representative, comments, dates
What’s included in a Request for Proposal?
Superior landlord, lessor (if applicable), lessee details, Demise, high level lease terms, rent and other outgoings, tenant incentives, fees, conditionality, reinstatement provisions, alienation provisions, alteration provisions
Why did you do cashflows?
I was intending to compare two differing lease scenarios to understand whether the new option was more financially viable thean their current option. I then negotiated heads of terms once it was evalauted that the move was financially viable. (LondonMetric)
Necessary due diligence?
AML checks, COI checks on client
What AML procedures would you follow if you were dealing with a Special Interest Person?
enhanced DD, further scrutiny on accounts, can try get references for the client, try and do business face to face, monitor closely, greater understanding of source of funds and transaction history, check sanctions list
How did you know the LL’s preferences (St. James’s acquisition)
We had acquired a floor in the building previously for a client so I had understanding as to what the LL wanted
What is the vacancy rate in St James’s
4%
Why did the client want to be flexible?
Just moved from Hong Kong, first office. Brought them to a fitted out floor
What rent free did you achieve?
6 months initial 4 months post break. initially negotiated 9 months and 6 post break
Why did you consult building consultancy team?
As there was costing needed for changes within the premises.
Where else could you find info on this?
BCIS - Build Cost Information Service
Why are tenants desiring flexibility ?
Post covid, WFH, agile working, people not coming back to the office. This company was also in rapid growth period
What is CAT A+?
When the client either tailors fit out to tenant or fits out prior to letting, in order to minimise void and maximise headline rent.
Why did you submit 3 years of audited accounts?
Showing 3 years audited accounts. If net profit was more than three times the amount of the annual rent then no deposit is required.
What is a joint schedule of condition?
Where joint agents carry out a schedule of condition alongside one another
Does this tend to favour the LL or the tenant?
It tends to favour the tenant. Tenant’s agent requested this and I advised to negotiate fixed dilapidations on top of this.W
Why fixed dilaps?
To protect my client at lease expiry and ensure they would receive enough capital to refurbish the floors back to re-letting standard.
