Break Option Strategies

The current market gives tenants an unusually strong hand in leveraging real value from their break option. Having first agreed an acceptable risk assessment, we have advised clients in serving their break notice so as to precipitate a lease renewal negotiation.

The prospect of a landlord losing rental income, coupled with assuming primary liability for business rates has provided a very strong negotiating platform. From here we have regularly secured preferential lease renewal terms for our tenant clients – often including a substantial rent free period, which can be a very welcome aid to cash-flow in these challenging times.

Alternatively, the negotiation following service of the break notice has been used to agree a variation to the existing lease – in one particular case we agreed terms for a rolling (rather than fixed-date) break for a client that needed more time before reaching a decision about exiting the building. This was achieved by agreeing a deed of variation linked with the withdrawal of the break notice.

As well as structuring deals around break option opportunities, we also provide a full service to both landlords and tenants concerning the exercise of break options more generally. The area can be a minefield and we work closely with our clients to agree on what is needed to be done – and equally importantly, what is to be avoided!

We will work with you and your surveyor to tailor and achieve a solution which meets your commercial requirements.