Lease Regear Calculator
NPV Benefit of Regear
£0
(vs “do nothing” scenario)Payback Period
—
(when regear outperforms)Break-even Rent Reduction
0.0%
(max cut before regear is worse)This calculator provides an indicative financial comparison only and does not constitute advice. Outputs depend on assumptions (break probability, void, incentives, costs and discount rate). For a specific asset, a lease regear should be assessed alongside covenant strength, market evidence and strategy.
Method: discounted cashflow comparison. “Do nothing” includes an expected break outcome weighted by break probability. Regear assumes break risk is removed for the extension period.
Lease Re-Gear Calculator
Leading Commercial Chartered Surveyors in the Midlands, Shepherd Commercial deliver a lease re-gear calculator for use.
Lease Re-Gear Calculator Guidance
A lease regear is an agreement between a landlord and tenant to vary the terms of an existing lease, typically by removing a break option or extending the lease length in return for a concession. Common concessions include a rent reduction, capital contribution or rent free period.
The Lease Regear Calculator above has been designed to help landlords understand whether a proposed regear is likely to improve the long term income and security of a commercial property when compared with taking no action.
How the Lease ReGear works?
The calculator compares two scenarios:
The first assumes the lease continues unchanged, taking account of the risk that the tenant may exercise a break option. This scenario allows for potential void periods, re letting costs, incentives and changes in rental value.
The second scenario assumes a lease regear is agreed, with the break removed or deferred and the lease extended in return for a rent reduction or capital contribution. The calculator then compares the expected cashflows under each scenario using a discounted cashflow approach.
The output shows whether the proposed regear produces a net financial benefit over time, how long it takes for the regear to pay back, and the level of rent reduction that would make the deal break even.
Why Lease ReGears?
For many landlords, particularly those with small retail units or mixed use properties, a lease regear can reduce income volatility and protect asset value. Securing longer unbroken income can be more valuable than achieving a higher headline rent, especially where market conditions are uncertain.
Lease regears are often used to de risk assets ahead of refinancing, sale or long term hold strategies.
Important Disclaimer
The Lease Regear Calculator is provided for illustrative purposes only. It does not constitute financial, legal or valuation advice and should not be relied upon when making investment decisions. Actual outcomes will depend on lease terms, tenant covenant strength, market conditions and professional negotiation. Shepherd Commercial accepts no liability for reliance placed on the calculator outputs.