Selling rented out commercial property

startled_cat

Hi.
I own a small commercial retail property that I rent out. Due to circumstances I need to sell it. The tenant signed a 10 year lease 9 years ago, (9 month left). I am obviously going to offer it to them first (property is not overly expensive, and the price would certainly be less than what has been paid in rent over the nine years).
So my question, if they do not want to purchase it, would I likely get more for the property if I got her to sign a new lease for another 5 or 10 years (if she wanted to) or would it be better to sell it with her only having 9 month left on the lease?
This isnt a good situation, and I really dont want to sell, but have to. (not due to finances).
I can not hold on the 9 month before I sell.
Many thanks for any help.

davidmcn

Probably better to have a longer term investment already set up, though depends on the current rent level, the covenant of the tenant, and whether the property perhaps has other potential for redevelopment etc.

Bear in mind commercial properties tend to sell (even) more slowly than residential ones so don't expect a quick sale - though if you need one of those then auction is probably the way to go.

startled_cat

Many thanks for the swift reply. It may well end up having to go to auction.
Hope fully the tenant would prefer to buy it as they have built up a good business in it.

daveyjp

If the lease is protected you are running out of time to start serving the notices to either end or agree a new lease.

I would start that process first. Even if she only has 9 months left she probably has a statutory right to a new lease anyway. Fail,tomserve the notice snd you are just delaying the process.

See a landlord and tenant surveyor who can advise on the process.

SmashedAvacado

Her renewal right will depend on whether the lease is contracted out or not

Generally a new long lease would add value - for smaller properties with small businesses as tenants it’s not always the case that five or ten years would make much of a difference - particularly if the company is a tenant and the lease is not guaranteed by the individual.

An agent will be able to advise on the best thing to do - and can run the values on the various scenarios. I would guess a 10 year lease with no breaks would give you the best value provided your tenant is a decent business