Please help me end my lease early.

[BlackSpider]

You guys are the best and most knowledgable people around, that's why I'm here for some advice, please.

I'm renting an industrial property for my business and we have just come to a stage where it is too small. We need something about double the size and there are still 9 months left on the lease at $500 + gst/week. We are also renting half of next doors warehouse just casually for $250 + gst/week, which can be ended anytime. I can get something very suitable for $1200/week. We really have to get out asap because the warehouse is currently not set up correctly with the right racking for easy operations and it is getting worse as we bring in more products all the time.

So can anybody give any creative advice on how to end my lease early?
We asked the managing agent to help us find a new tenant to take over the lease and we pay one months rent as a fee, but since they have us locked in to the lease, they are not trying hard.
Maybe we could sublet for the remaining lease period.
Or I was thinking to give the landlord an option of paying 3 months rent and he can have the place back in one month so we can move out and be clear of the lease.

Is there any other way of getting out of this lease without paying double rent for the full 9 months, as the business just can't operate and grow any more under these conditions.


Thank you very much for your consideration.


Spider.

 

[marg4000]

Have you approached the landlord directly?

You have nothing to lose, and you don't know his/her plans for the building. For all you know he/she may be waiting for the end of your lease to do something else.

I think it is worth a try.
Marg

 

[WinstonWolfe]

If your business is growing so rapidly, I presume your cash flows are looking on the up.

I'd also suggest you talk to the owner directly, and bugger the agent.

If the owner isn't prepared to help you out of the lease early via subletting, try this as a comeback............ ask him if it is because he has concerns about finding a suitable new tenant. If he says yes, ask him his opinion about the economy and the quality of the property. It is likely he will respond with some negative slant to justify his resistance to letting you out of the lease early. Let him rattle on about all the negatives.

THen, put it to him that you can help him out of the difficult situation of owning a property in such difficult economic circumstances, by buying the property. Do your DD first so you can make a reasonable offer...

If he resists selling, then point out he can't be that concerned it will be difficult to find another tenant at a reasonable return.

Before approaching him though, go over your lease agreement and ensure you can sub let without his approval.

 

[BlackSpider]

Thanks for the replies guys.

I will definately speak with the owner tomorrow morning about the situation.

This just reminded me that the owner also owns the unit next door too, and the tenent there knows the owner, (they are waterfront neighbours, Sylvania Waters) and is just storing his 3 massive motor homes and a boat in the place. I'm sure he is only on a short or temporary lease.

It could be an option for me to rent next door as well.
The dividing wall is only that sandwich board stuff also (foam in between sheet metal panels) 6m to the ceiling, maybe a few of these could be taken out to allow access so we don't have to open both roller doors.

Thanks for the thoughts.
Something else may reveal itself by talking to the owner directly.


Spider

 

[grossreal]

hi spider
here's one from left field and something that the owner will like as long as the returns are there.
talk to the owner direct tell him what your requirements are and how long you would like to rent for ie 3 x 3 or 5 x 5.
he then has an area to look for to invest for you.
then its a straight roll over lease from one property to another.
the new property he negotiates a 6 months delayed settlement so you can fit out or what ever and your lease transfers from one property to another.
I am in the middle of doing one of these at the moment.
to get out of a lease is hard depending on the lease and can be expensive.
remembering you are in sydney and rents for commercial are moving up its a good time to either lock you rent or buy.
most owner even in this market are going to require 4 months notice to get new tennants I ask my tennants 12 months before they come due to give me there business plan for the next 3 years hence the reason for looking for larger premises.
always try if possible to talk to the person that make the calls on any deal and a real estate is not that person.
if they don't want you to get to the owner send a note for the owner to ring you to discuss your future plans always gets a coffee meeting.
and then you may find that he wants you out as much as you want out
if your rent is low.

 

[BlackSpider]

Thanks for your comments grossreal.

I have spoken to the owner this morning to let him know of our situation.
Hopefully he'll work something out for us.


Thanks

Spider