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  • Landlord Resources

    Sell freehold commercial property to lessee

    Hi
    I am thinking of selling my commercial property. I have an existing tenant who has 9 years left on the lease.  I have had the property valued and the investment value is less than the vacant market value if there was no tenant in place.

    I wonder if anybody would know if the existing tenant would be expected to  pay the investment value or nearer to the full value of the building. (The full value of the building is quite a bit higher) I ask because I have had conflicting views from surveyors.

    I look forward to any answers, thank you.

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    Does Lease contain a Landlord's break clause?

    Is the tenant in a financial position to buy anyway?

    With S.24 and government over-regulation of residential tenancies, commercials are becoming more attractive.

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    Hi  Thanks for your reply

    No the lease does not contain a break clause

    The tenant has expressed an interest in purchasing depending on the price but I  do not know if they can  raise the finance as we have not yet discussed price

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    If you'd like to sell, I think you just need to lay your price on the table and let the tenant go away and see if they can raise the finance.

    Commercial lending usually requires big deposits of 40-50% so hopefully they've got deep pockets.

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    Your commercial tenant may have the right of first refusal in anyhow (does he/she in the lease?), and anyway a good gesture to offer him/her the property, but it would really depend on your demand; I have two commercial property and I am after the third one and I am after 7% yield, full insurance and repairing term, solid tenants, no break clause, upward rent review only etc etc but there are several other variable that seller and buyer are considering etc etc.

    Where is the property? Can you hint at the two valuations? Annual rent? Next rent review? How is the area?

    I maybe interested myself.

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