Once you understand the value of a Sublease and you are willing to accept the constraints associated with the sublease, how do you find the right sublease that provides your firm with the benefits that can be had? Namely Price and Enhanced Improvements. At any given point in time, the market is filled with offerings of subleases in the market. However, most of these advertised subleases are not real.
- Often times Tenants advertise space available as a Sublease, however that space is occupied and not available unless the Tenant secures a subtenant willing to pay the same rent the Tenant is paying to the Landlord and the underlying Tenant secures replacement space satisfactory to the Tenant. You can imagine the waste of time getting involved with a transaction with those unknowns.
- Tenants can be in default of their lease as a result of non- payment of rent. Landlords will not provide consent to a Subtenant under this scenario.
- The Tenant is not financially strong enough to pay the Landlord the delta cost in the event he accepts your below market offer.
- The Lease has termination rights that are not disclosed in the advertised offering. One could begin negotiations on a 4 year sublease term, and find out the Tenant has a termination right 2 years into your 4 year sublease.
- The Sublease term being offered has less than a year left on the term.
What should you do?
Hire a broker that understands how to find and negotiate a below market deal. Call Mike Fox at 215-568-8000