From Lease to Ownership: A Creative Win-win in a Tight Commercial Market

A challenging market calls for a creative approach.

The property in question – a modern, high-quality strata office suite in Lindfield – had been listed for sale by a retired business owner who was keen to capitalise on his investment. With few comparable sales and limited demand, the odds of a quick transaction were low. Yet within a couple of months, our commercial team, led by Bill Geroulis, found a way to match the right person to the property by reimagining what the transaction could look like.

“Strata office space just doesn’t generate the demand it used to,” says Bill. “So when we had a leasing enquiry that aligned perfectly with the property, we saw an opportunity to structure something outside the norm.”

A lease enquiry becomes something more.

The prospective tenant wasn’t in the market to buy. In fact, purchasing the space hadn’t even crossed their mind. But when they inspected the Lindfield suite, it was clear it was a perfect fit. That’s when we proposed an alternative structure: lease the space for 12 months at full market rent, while simultaneously exchanging contracts for sale with a long settlement and a reduced 5% deposit.

The sale price was $2.65 million, and the lease was negotiated at $120,000 per annum. The 5% deposit was released to the vendor on exchange – a key term that required careful negotiation and sound advice.

“There was some hesitation from the purchaser’s legal team around releasing the deposit early,” Bill explains. “But once they understood the buyer would be occupying the premises from day one – and that the risk was minimal – they came around.”

A standout building in a standout location.

The property itself played a big part in the success of the deal. Located on the desirable east side of Lindfield in a quiet, tree-lined street with excellent parking, the building is home to a mix of medical specialists and professional services. Built to a high standard around 20 years ago, it has aged gracefully and continues to appeal to owner-occupiers and tenants alike.

“The prospective tenants were in the construction industry and looking for a headquarters for their business,” says Bill. “This space offered dual access points, excellent natural light and a smart, professional presentation. It ticked every box – and they knew it as soon as they walked in.”

Benefits on both sides of the table.

For the vendor, the structure offered the certainty of an unconditional sale with a 12-month settlement period, passive rental income in the interim and a released deposit on exchange. As a former owner-occupier who had retired and sold his business, the property had recently become vacant following the expiry of the previous tenant’s lease. Consequently, the owner was motivated to sell – but not at the expense of unnecessary delay or a complicated leaseback.

The deal gave him everything he needed: a passive income, certainty, an injection of cash in exchange and a defined exit. For the buyers, the flexibility of a delayed settlement provided time to arrange finance, plan their transition and take up immediate occupation.

Why lateral thinking matters in today’s market.

In today’s environment, the most successful transactions are rarely textbook. They require flexibility, foresight and a deep understanding of both sides’ needs. For Shead Property , it’s not just about finding a buyer or a tenant – it’s about creating solutions that make sense in a shifting market and work for both parties.

“It’s satisfying when you can see a deal through like this,” says Bill. “We helped the vendor achieve a great result and helped the tenant/buyer secure a space that supports their business long-term. That’s what it’s all about.”

Conclusion.

When market conditions are tight, it’s easy to say no to something that doesn’t look like a perfect fit on paper. But with the right advice and a bit of imagination, even a simple lease enquiry can turn into a strategic purchase.

At Shead Property, we specialise in making commercial matches others might overlook – and creating outcomes that benefit everyone involved.

To discuss your commercial property goals or learn more about recent activity in the North Shore office market, contact Bill Geroulis on 0413 100 200 or email bill@shead.com.au.