Leasing and Letting L2 Flashcards
Explain a factor you have come across which impacts upon letting value / lease terms.
Where I work, one of the biggest factors is building condition. Many properties are historic, sometimes in poor repair or with defects. Small tenants are more risk averse and building issues quite quickly translate to longer voids, less competition, lower rents and weakened repairing obligations. I almost never deal with white box grade a.
Explain an example of when you have provided marketing/leasing strategy to a client.
Berrybank. Advised the client on unit configuration and leasing strategy for a new commercial development on the outskirts of Stow.
Local tenant profile
Timescales for marketing
Target pre-let
Target tenant mix
Dedicated website operated by client.
Regional marketing rather than just local.
Seek an “anchor tenant”
Talk me through an example of when you have let a property.
The Bank.
-Sold previously
-Client strategy, long term hold holiday lets above, covenant important.
-Appraisal, considered prime location, but hard frontage.
-Terms
- Marketing
- Negotiation
2 Brewery Yard, Stow. In this instance, explain the relationship of the client and the landlord, are they the same?
Yes they were owner occupier, but looking to move out of retail in this area as it was no longer profitable for them. They opted to lease the premises rather than sell so they were client, landlord and former occupier.
2 Brewery Yard, Stow. What do you mean by secondary location?
Not in the towns primary retail area. Footfall much lower, but still in close reach of the Market Square.
2 Brewery Yard, Stow. Tell me your opinion on market rent and how you got to this.
The property was a retail premises over 3 foors with large atria that spanned all three floors. It was in very good condition.
Zoned the premises and based market rate on recent comparable transactions. This produced a rent of £14,000.
When I “stood back and looked” it felt very good value, and I thought it would draw high levels of competition, so I advised the client to seek a higher asking rent of £17,500 which reflected £45 ITZA. At odds with comparable evidence but proved successful.
2 Brewery Yard, Stow. What was the commercial property market like in Stow?
Good. High volume of independent traders. Higher priority on premises condition, heavy tourist trade, private landlords, almost no institutional investors.
2 Brewery Yard, Stow. What was in the marketing particulars?
Location
Accommodation
Flexible lease terms.
New lease
Rent
Service charge
Photos
Use Class
EPC
Ratable Value
Reservation Deposit
Repairs
Tenant liability for cost of freehold consent.
2 Brewery Yard, Stow. How do you protect your client when it comes to producing particulars.
Not an offer or contract
illustrative but not reliably accurate
Rely on own investigation
Firm not authorised to give representation or warranty.
2 Brewery Yard, Stow. If there was a mistake in the marketing particulars, how would you handle this?
Correct the mistake.
Inform the client.
Inform any know interest to apologise and update them on the matter.
2 Brewery Yard, Stow. Tell me about the heads of terms in this matter.
A summary of all the pertinent parts of the negotiated agreement.
L&T
Represantatives
Term
Rent
RR Clause
Alienation
Incentive
Breaks
Repairs
Alteration
L&T 1054
2 Brewery Yard, Stow.Is there anything you need to do following completion?
Solicitor register the lease.
Me log the comparable.
Note the rent review and renewal date
2 Brewery Yard, Stow. What is the significance of a lease for less than 7 years?
Register with land registry.
