City Sale and Leaseback of Part

Location, size and uses

City corporate HQ, comprising 1965 sq m (21,150 sq ft) office and 30.47 sq m (328 sq ft) retail, a significant proportion of the building was sub let to external tenants. 

The brief

Trilogie CRE were appointed to investigate the options for minimising the clients ongoing liabilities in the building including ensuring the clients future commitment to the building was flexible and to dispose of the freehold interest at a figure exceeding book value and sufficient to cover early loan repayment penalties.

Key objectives and constraints

• There was a significant ongoing maintenance liability
• The book value was very high
• A proportion of the building was vacant, circa 40%

Actions and outcome

Agents were appointed by Trilogie and an investment package was prepared which included:

• Limited rental guarantees on the vacant parts to maximise the investment value
• Monies were agreed to be held in escrow to ensure essential maintenance works could be undertaken based on the clients costings
• Flexible occupational leases were prepared as part of the sales package providing break options and minimal repairing liabilities to the client in the space they continued to occupy
• Incentivised fees were agreed with the agents geared to the target values.

Trilogie input

• Options study and due diligence
• Feasibility study and advice
• Appointment and management of agents
• Negotiation of terms for the disposal and part leaseback.
• Liaison with lawyers, purchasers etc to ensure successful completion
• Handover of complex service charge arrangements

For further information contact Peter Boros - pb@trilogiecre.com or Nicola Mottershaw - nm@trilogiecre.com.