Extending a lease prior to selling a business

[teejayork]

Hi all. First post here so be gentle!

I am potentially looking to sell my retail business next year. However, our 10 year lease is coming to an end. Would you advise arranging a new lease with our landlord and then selling the business and assigning the lease? So not mentioning to the landlord I would like to sell. Furthermore, excuse my ignorance with leases as it was a long time ago. If we were to negotiate a new lease along with say a 3 year leave clause, will the same terms apply to the new owners?

It is a very successful business, i’m just burnt out. Oh and it’s also probably important to say that the landlord isn’t the easiest guy to deal with!

Thank you for your advice.

 

[pentel]

A lot will depend on the terms of the lease. A lease can be an asset or a liability.

Selling a business can take up to a year or more so you need to get this underway asap.

 

[WaveJumper]

As above and make sure you fully understand the terms within the lease informing your landlord you are not going to renew. Which would need the landlords permission to resign the lease in the event of you selling the business again as mentioned above this realisably is going to take one hell of a long time in the present economic climate unless you happen to have potential buyer already lined up.

Many a landlord, not wishing to see their property empty may consider a temp arrangement where you continue on after your lease comes to an end until either they have a new tenant lined up or you have a buyer. What I personally would not do is commit to any new lease especially if you want out.

 

[Greg PW Shearman]

There is a potential to negotiate your terms down .

Are there empty retail units nearby ? If so the landlord will be sweating .

Get a price per sq foot on the empty units and ask how much rent free they will offer to move .

Then take that to the table.

If I was in your shoes get a new lease with a break clause from your side only after two to three years. also make sure no rent increase possible for at least 5 years , this will all make your business more valuable to sell.

 

[teejayork]

As above and make sure you fully understand the terms within the lease informing your landlord you are not going to renew. Which would need the landlords permission to resign the lease in the event of you selling the business again as mentioned above this realisably is going to take one hell of a long time in the present economic climate unless you happen to have potential buyer already lined up.

Many a landlord, not wishing to see their property empty may consider a temp arrangement where you continue on after your lease comes to an end until either they have a new tenant lined up or you have a buyer. What I personally would not do is commit to any new lease especially if you want out.

 

[teejayork]

Thank you. Mixed recommendations. I guess I had thought that having a new lease in place would be more attractive to a buyer, so at least they would know they’re secure.

 

[teejayork]

There is a potential to negotiate your terms down .

Are there empty retail units nearby ? If so the landlord will be sweating .

Get a price per sq foot on the empty units and ask how much rent free they will offer to move .

Then take that to the table.

If I was in your shoes get a new lease with a break clause from your side only after two to three years. also make sure no rent increase possible for at least 5 years , this will all make your business more valuable to sell.

 

[teejayork]

Thank you. So without checking with a solicitor I was wondering whether leases which are reassigned continue with same break clauses.
Yes a few empty properties around as we’re a city centre business.

 

[WaveJumper]

In an ideal world you’d think having a nice lease in place would be desirable, but the reality is will the business sell, chances are if I’m honest no, even if it does it could take a couple of years. Then of course it might not sell at all, you wish to get out, you now stuck with a lease unless of course you got an early get out clause you can fall back on.

Of course you maybe lucky sign a new lease sell the business landlord agrees to assignment and all is dandy for a couple of years until current owner fails leaving the landlord chasing you on the remaining lease.

 

[teejayork]

In an ideal world you’d think having a nice lease in place would be desirable, but the reality is will the business sell, chances are if I’m honest no, even if it does it could take a couple of years. Then of course it might not sell at all, you wish to get out, you now stuck with a lease unless of course you got an early get out clause you can fall back on.

Of course you maybe lucky sign a new lease sell the business landlord agrees to assignment and all is dandy for a couple of years until current owner fails leaving the landlord chasing you on the remaining lease.