Fund manager clients of ours in St James’s Street were facing a rent review in July 2009 but their lease also provided a simultaneous tenant break option subject to a six months prior notice.
As is almost always the case in modern leases the rent review was to be on an upwards only basis. The office letting market was at a low point and the market rent of our clients office space was below the rent passing. In view of this, and to improve our bargaining position the tenant’s break option was exercised.
Over the six months notice period Wright & Partners executed a search to find alternative offices whilst at the same time negotiating with our clients’ existing landlords in respect of a new lease as it was our client’s preference to remain in their existing space albeit on more attractive terms. This strategy enabled us to negotiate a new lease on the existing accommodation subject to a 12 months’ rent free period reflecting a saving in rent of circa £500,000 which we would not have secured had the break option been left unexercised.
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