Strategic Real Estate Consultancy

Question 1

What are three inputs you used for an NPV

Answer 1

1) Rent
2) Service Charge
3) Legal/ Agents fees

Question 2

How would you deal with Rent Reviews in an NPV

Answer 2

You would model two different lines

Question 3

Did you use FM and capital costs for an NPV?

Answer 3

No, this was done by the in-house finance team at the client

Question 4

How was the discount rate determined for an NPV?

Answer 4

It was set annually by the client

Question 5

What would you do if you did not have access to JLL agents

Answer 5

Utilise the RICS network

Question 6

What would you do if your tenant client had a reversionary property

Answer 6

Warn of risk of rental increase

Consider utilisation

Consider early renewal

Question 7

What is the average square feet per person in an office?

Answer 7

100 sq ft

Question 8

What is a traditional notice period terminate be serviced office

Answer 8

Three months

Question 9

When auto renewing does the license renewal on the same terms?

Answer 9

It renews at the market rates, which is often a marginal increase

In this case it remained the same

Question 10

How many properties were in the portfolio?

Answer 10

30

Question 11

What is the difference between managed and serviced office?

Answer 11

Managed allows a more bespoke finish

Managed is typically slightly longer time (upwards of 12 months)

Managed is for slightly more developed businesses (20+ employees)

Question 12

What was the serviced office monthly cost before and after final negotiation

Answer 12

£2,500 per month

£2,400 per month

Question 13

Were you competent to negotiate the serviced office?

Answer 13

Yes, very simple deal

Supervisor was previously an agent and was experienced with complex lease negotiations

Question 14

How much was the saving across the entire lease term for the serviced office?

Answer 14

Only a couple of thousand pounds

Client wanted to be ahead of the market

Question 15

Is the lease term fixed on a serviced office license?

Answer 15

Yes, now getting out of it

Question 16

Where was the serviced office for the negotiation competency?

Answer 16

Reading

Question 17

Where was the serviced office for the critical dates tracker example and how much did it renew for?

Answer 17

Staines

£3,000 per month

Question 18

Where was the office for the portfolio optimisation example?

Answer 18

Maidenhead

Question 19

When would you advise and occupy client to renegotiate on an under rented property?

Answer 19

If it was a tenant-favourable market

Question 20

What timeframe was the growth?

Answer 20

5 years. That’s what lease term they were prepared to commit to

Question 21

How much growth was projected?

Answer 21

10 people

Question 22

If you change your employees work style, what is required?

Answer 22

Good change management

Question 23

How early were you looking to go for inside and outside the act early renewals/regears?

Answer 23

18 months

24 months

Question 24

Why not wait for rents to drop further for Maidenhead (portfolio optimisation)?

Answer 24

Rents (mid-23) were lower than pre-pandemic (when agreed) but we’re expected to increase

Question 25

For portfolio, optimisation example, was the space fully utilised

Answer 25

Yes - client wanted to retain same amount of space in same area it was just a rent analysis

Question 26

How much space was able to be cut in consolidation example

Answer 26

2.5K

Question 27

For an outside of the act lease how long in advance can you negotiate

Answer 27

As long as you wish

Question 28

Why did you recommend a JLL agent?

Answer 28

I was familiar with competence of the team and expertise in particular market

Question 29

Is there a conflict by instructing a JLL agent?

Answer 29

No, there was clear, separate terms of engagement and agents would have to go through usual conflict checks

Question 30

How far out from critical date would you typically start process?

Answer 30

6-12 months

Question 31

What are the states of dealing with critical date

Answer 31

Informing client 6-12 months out Allowing them some time to strategise (0-2 months) Engage agent

Question 32

How did you get to space requirement?

Answer 32

Growth headcount * 0.6 (days per week) * 1.2 (multiplier) = peak average show ups Peak average show ups * 100 sq ft (industry benchmark per person) = total space required

Question 33

How much was saved on the early renewal, including fees?

Answer 33

Circa £20,000 from the date of agreement to the original lease expiry

Question 34

By reducing the £ psf by £2 for Maidenhead, how much was saved between the early renewal and original expiry date

Answer 34

Around £20K

Question 35

For the portfolio optimisation exercise, how far ahead were you looking compared to the usual tracker check?

Answer 35

24 months rather than 6-12

Question 36

How long before licence expiry and notice date did you seek strategy for Staines serviced office (critical dates)

Answer 36

Informed 4 months before expiry; 1 month before notice

Question 37

What did the desk showing ratio go from and to (person per desk)

Answer 37

1:1.2 1:0.7