Managing a complicated multi use property scenario to better gains
A case study in smooth negotiation over complex situations. Peter’s personal approach ensured this transaction happened, despite a myriad of complications between commercial and rental leases, with all parties coming out satisfied.
PROBLEM
This property was an end of parade commercial unit, close to Kentish Town Underground that was split into two commercial units on the ground, first and second floors. The two units were under separate leases and the owner, a woman in her 90’s was hoping her tenants and former employees would buy her out.
The ground floor tenant was looking to sell up, despite the fact that the owner had not collected rent for months. Meanwhile there were no takers for lease commercial assignment or the freehold. The upstairs tenant had spilt with her business partner and had not renewed the lease on the sui generis use class commercial unit. The property was on the market for £700k with poor rental combined of £22k in total.
SOLUTION
A purchase price of £640k was agreed for a quick exchange. Peter organised the buyout of the leases separately and meanwhile, submitted for planning in two stages, extending and sub dividing.
The team also negotiated a surrender of the upstairs tenant’s unsigned lease renewal for £14k compensation, as well as an agreement to stay for 6 months to move the business.
OUTCOME
The outcome was lucrative. An application was submitted to extend the ground floor and create a mansard, along with a change of use from sui generis to C3 residential. The ground floor retail unit was then purchased for £30k.
Other obstacles were overcome, like creating an access point for ground floor unit by implementing the change of use planning, which converted the hallway use class to C3.
Prior approval was submitted to sub divide the retail unit to a rear ground floor garden flat with access from the side, and a self-contained retail shop with no reduction to the shop width. This enabled the team, once planning was achieved to create three apartments (2x 2 beds and 1 bed) and a comfortable retail unit, all within a project timeline of 7 months.
The gross development value at project’s end was £1.95m.
