Case Study Examples
Landlord Advocacy: $180,000+ Recovery & Value Creation
KEY OUTCOMES
Back Rent Recovered: $180,000+
Rent Uplift: ~20% increase
Annual Income: Six-figure income stream
Total Value: ~$7-figure benefit
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Introduction
This case study documents a successful engagement we at Klug Limited conducted for a major property owner, showcasing our role as a strategic partner in maximising asset value. What began as a standard market rent review for the anchor tenant of a prominent shopping centre—a national supermarket chain—evolved into a multi-faceted project. Through our expertise, we delivered a comprehensive result that included the recovery of significant historical back rent and a highly favorable negotiation for future rent and lease terms. This project serves as a powerful example of how our professional, strategic landlord representation can unlock substantial value and secure long-term financial gains. Critically, it also demonstrates the importance of engaging expert advisors in a timely manner to avoid the permanent loss of significant income.
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A Two-Pronged Approach to Value Creation
Our engagement was defined by two key successes, achieved through a proactive and detailed approach to lease management.
Part 1: Uncovering Nearly a Decade of Lost Income
As part of our initial due diligence, we conducted a forensic analysis of the historical lease and sales documents. Our expertise in lease interpretation allowed us to uncover a critical, overlooked turnover rent clause that had not been correctly applied by the tenant for nearly a decade.
Our deep dive into the sales data revealed a pattern of underpayments spanning nine consecutive years. Our comprehensive analysis identified a total potential underpayment of over $1.5 million.
However, due to the six-year statute of limitations for commercial rent claims in New Zealand, a significant portion of this amount was no longer legally recoverable. This discovery highlighted a sobering reality: over $1.3 million in landlord income had been permanently lost simply because the issue had not been identified and addressed within the statutory timeframe.
Despite this constraint, we were able to issue a formal Letter of Demand for the most recent and legally enforceable period. This structured approach led to the successful recovery of over $180,000 in back rent, a significant financial win for the landlord, realised before the new rent review negotiations had even formally commenced.
The Critical Lesson: Timing Matters
This case powerfully illustrates the critical importance of engaging expert lease advisory services on a proactive, regular basis. Had we been engaged earlier in the lease term, the landlord could have recovered the full $1.5 million in underpaid rent. Instead, the delayed engagement resulted in the permanent loss of over 80% of the potential recovery, due toits the statute of limitations. This represents a substantial opportunity cost that could have been entirely avoided with timely professional oversight.
Our work not only recovered what was still legally available but also prevented further losses by ensuring the turnover rent clause would be correctly applied going forward. This case underscores a fundamental principle: proactive lease management is not a cost—it is an investment that protects and maximizes asset value.
Part 2: Strategic Negotiation and Future-Proofing the Asset
Running parallel to the back rent recovery was the primary task of negotiating the market rent effective from the upcoming review date. This process unfolded as a clear demonstration of effective, data-driven negotiation.
The negotiation began with the landlord and tenant issuing their respective notices, revealing a significant 42% gap between their opening positions. Each side was supported by their respective valuer's assessment. Through skilled negotiation and professional management of the process, we successfully bridged this gap over the following months, securing a final rent far closer to our initial, well-researched assessment.
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The Final Outcome: A Comprehensive Victory
The engagement concluded the following year with a Deed of Variation and Renewal of Lease that represented a comprehensive victory for the landlord.
Financial Gains:
• Back Rent Recovered: A one-off payment of over $180,000
• Rent Uplift: An increase of nearly 20% on the previous rent
• Total Contract Value: The rent increase alone secured an additional six-figure income stream annually over the new long-term lease
A Strategic, Negotiated Outcome:
• Secured a Long-Term, High-Value Tenancy: Primary strategic achievement was securing a new multi-year lease renewal at a significantly higher rent, providing the landlord with long-term income security and enhancing the asset's overall value
• Structured a Favourable Long-Term Deal: As part of our landlord advocacy, we structured the final agreement to maximise value. By strategically leveraging terms such as the timing of future rent reviews and contributions to tenant works, we were able to lock in a substantial rental uplift and a long-term commitment from the anchor tenant, demonstrating a sophisticated and commercially astute approach to the negotiation
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CORE COMPETENCIES DEMONSTRATED
✓ Forensic Lease Analysis - The ability to uncover hidden value and identify long-term compliance issues through a deep understanding of complex historical lease documents
✓ Proactive Landlord Representation - The dedication to protecting our clients' interests and proactively identifying opportunities for value enhancement—and the expertise to act within critical legal timeframes
✓ Effective, Data-Driven Negotiation - The skill to manage a large gap between opposing valuations and achieve a superior outcome through professional, well-prepared negotiation tactics
✓ Strategic Asset Enhancement - The vision is to see beyond a single rent review and deliver holistic value through back rent recovery, lease renewal, and favourable long-term outcomes
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Conclusion and Key Takeaway
This case study is a definitive example of the immense value we at Klug Limited can deliver. By combining our meticulous analysis with professional and strategic negotiation, we not only met the initial objective of a successful rent review but also uncovered and recovered significant historical underpayments. The total financial benefit to the client—combining back rent recovery and increased rental income over the new term—approached a seven-figure sum, making this engagement a resounding success.
However, this case also serves as a cautionary tale. The over $1.3 million in unrecoverable back rent represents a permanent loss that could have been entirely prevented with earlier engagement. This underscores a critical message for all commercial property owners:
Proactive, expert lease management is essential. Engaging qualified advisors like Klug Limited on a regular, timely basis is not an expense—it is a strategic investment that protects your income, ensures compliance, and maximises the value of your assets. Delays can result in the permanent loss of significant income that can never be recovered.
This case is a testament to the power of our proactive, expert landlord representation—and a reminder that timing is everything in protecting your investment.
This case study has been anonymised to protect client confidentiality. All identifying details regarding the property, landlord, tenant, and specific dates have been removed or generalised.
Have a similar situation? Contact us to discuss how we can help maximise your asset value.
Crisis Management: $675,000+ Saved for National Fitness Chain
KEY OUTCOMES
Total Savings: $675,000+ NZD (NPV)
Leases Managed: 58 gym locations nationwide
Crisis: COVID-19 mandated closures
Outcome: Critical financial relief during unprecedented disruption
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Introduction
In response to the unprecedented COVID-19 disruption, we represented a leading national fitness chain managing 58 gym leases nationwide. Through strategic tenant representation and expert-led negotiations, we delivered over $675,000 NZD in total savings (NPV), providing critical financial relief during mandated closures.
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THE CHALLENGE
Immediate Crisis: Government-enforced lockdowns in early 2020 led to a complete cessation of revenue across all 58 locations, while substantial lease obligations remained.
Portfolio Complexity: 58 unique lease agreements with diverse landlords—from institutional owners to individual investors—each with different financial positions requiring tailored negotiation approaches.
Strategic Imperative: Moving beyond simple rent deferrals to achieve genuine savings and secure operational flexibility for an uncertain future.
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OUR APPROACH
As exclusive tenant representative, we implemented a comprehensive three-stage methodology:
Strategic Positioning: Established baseline target of 50% rent abatement during restricted periods, with flexibility for site-specific optimisation.
Expert Negotiation: Direct, evidence-based engagement with all 58 landlords, leveraging market data and strong relationships.
Legal Protection: Formalised all agreements through binding Deeds of Variation and comprehensive documentation.
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MEASURABLE RESULTS
Immediate Relief:
• 19 sites: 100% rent abatement during lockdown
• 30+ sites: Partial abatements (40-90%)
• Total savings: $675,000+ NZD (NPV)
Strategic Value:
• 6 lease extensions negotiated
• 2 strategic surrenders for underperforming sites
• Portfolio optimised for post-COVID recovery
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CORE COMPETENCIES DEMONSTRATED
✓ Strategic Tenant Representation - The ability to represent a tenant's interests effectively across a large, complex portfolio of leases
✓ Crisis Negotiation - The expertise to negotiate effectively under extreme time pressure and unprecedented circumstances
✓ Portfolio Coordination - The skill to coordinate negotiations across 58 separate leases while maintaining consistency and maximising overall outcomes
✓ Landlord Relations - The ability to maintain positive relationships with landlords while securing significant concessions during crisis situations
✓ Creative Problem-Solving - The vision to develop innovative solutions (rent reductions, deferrals, modifications) that benefit both tenants and landlords
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Conclusion and Key Takeaway
This case study demonstrates the critical value of expert tenant representation during crisis situations. By coordinating negotiations across 58 leases, we delivered over $675,000 NZD in total savings, proving essential to the business's survival during the COVID-19 crisis.
The engagement highlights several key lessons:
1. Timing is Critical: Early engagement allowed us to develop a strategy before landlords became entrenched in their positions.
2. Coordination Matters: Managing 58 leases as a coordinated portfolio was far more effective than negotiating them individually.
3. Flexibility is Key: Creative solutions (not just rent reductions) often provide better outcomes for both parties.
4. Relationships Matter: Maintaining positive landlord relationships during difficult negotiations proved essential to achieving favourable outcomes.
Expert representation during crisis situations can be the difference between business survival and failure. If you're facing lease challenges or negotiation complexities, early engagement with experienced advisors can help you navigate uncertainty and protect your business.
This case study has been anonymised to protect client confidentiality. Specific lease terms, financial details, and identifying information have been modified or generageneralisedlized.
Strategic Advisory: Industrial Development Joint Venture
KEY OUTCOMES
Comprehensive Financial Modeling: Delivered detailed analysis of projected returns and profitability
Deal Structure Evaluation: Thorough assessment of fairness and risk allocation in 50/50 partnership
Market Benchmarking: Strategic positioning against alternative investment opportunities
Decision Support: Critical insights enabling fully informed investment decision-making
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Introduction
We provided independent strategic advisory to a major institutional property trust evaluating a 50/50 joint venture with a leading national retailer for the modelling and development of an automated distribution facility. Through comprehensive financial modelling and market analysis, we delivered critical insights that enabled fully informed decision-making on this landmark logistics investment.
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THE CHALLENGE
Financial Viability: A prominent institutional property trust needed to determine potential returns and overall profitability of the proposed joint venture development.
Deal Structure: The client required a thorough evaluation of fairness and risk allocation within the 50/50 partnership agreement.
Market Positioning: Benchmarking the opportunity against alternative investment options in the industrial property sector was essential.
Strategic Value: Understanding long-term benefits and strategic alignment with the trust's investment portfolio.
OUR ADVISORY SERVICES
We provided multi-faceted analysis across four critical dimensions:
Financial Analysis & Modelling: Developed comprehensive cash flow models analysing development cost scenarios spanning a nine-figure sum, evaluating rental yield structures, contribution methods, and blended yields against market benchmarks.
Market Assessment: Benchmarked proposed returns against comparable industrial property transactions, evaluating market yields, IRR ranges, tenant covenant strength, and lease structure competitiveness.
Deal Structure Analysis: Performed a thorough review of joint venture mechanics, partnership implications, respective land and improvement contributions, lease terms, and rent review mechanisms.
Risk Assessment: Conducted a comprehensive evaluation of development and construction risks, tenant covenant security, capital commitment opportunity cost, and downside scenario modelling.
KEY FINDINGS & RECOMMENDATION
Financial Performance:
• Returns marginally above market average but not exceptional for development scale
• Return on trust contribution is reasonable but conservative
• Modest development margin upside potential
Strategic Assessment:
• Strong defensive characteristics: premium tenant, long-term lease, inflation protection
• Projected returns below IRR ranges for comparable market assets
• Significant capital commitment with considerable opportunity cost
• Returns only marginally above prevailing market rates
Final Recommendation: While the joint venture provided stable, long-term income from an exceptional tenant, we advised that the investment was moderately positive but not compelling from a total-return perspective. Development risks were not fully compensated by return premiums, and alternative investments showed superior risk-adjusted returns.
VALUE DELIVERED
Our comprehensive independent analysis enabled the client to make a strategic decision with a full understanding of financial implications, market context, risk factors, and portfolio alignment. The client could confidently evaluate the proposal against their specific investment criteria and risk tolerance, balancing the commercial opportunity with available market alternatives.