215.568.8000

Subleasing

Perhaps you need M.S. Fox Real Estate Group's help in subletting your space. M.S. Fox has gained a reputation for its strength in successfully marketing and consummating sublease transactions. Its philosophy and approach to the sublease process is based on the concept that attractive 'as built' space in Class A office space buildings can be leased quickly, as long as the economics of the deal reflect the constraints of the existing lease.

A form of leasing overlooked by most real estate companies M.S. Fox Real Estate group, Inc. is experienced in resolving the complex issues that arise between the Landlord, Tenant and Subtenant. Our total commitment to the marketing process assures the client their office space will be promoted with the same level of excellence afforded to major building owners.

On the other hand, a 'Sublease' may be an ideal solution for your company.

Do you need office space right now? (Sublet space is generally finished and ready for immediate use).

Do you dream about having offices in a high-rise tower where the rates are beyond your firm's budget? Some of the best sublet bargains in town are found in new class A office towers.

Do you need short-term or seasonal expansion space? Sublet spaces can be available for terms as short as six months.

Marketing a Sublease :

When a company makes the decision to sublease their space, they often do not think of the unique characteristics of a sublease and what it takes to secure a subtenant. The remaining sublease term and the flexibility to demise the space is often not possible to change. The existing buildout is going to dictate a specific target market. Open space will attract tech firms while a traditional perimeter office layout will attract law firms and consulting firms. Because the company’s obligation is tied to the remaining term of the lease, who the firm hires to get the job done fast is critical. Unlike the traditional Landlord who has access to Improvement financing, custom design services and flexibility of lease term, the Sublandlord is saddled with the lease it signed and the obligations outlined in the lease.

Michael Fox recognized this challenge and has structured his marketing to differentiate the space and make it attractive to both Cooperating Brokers and potential subtenants. Time is critical because the sublease has a diminishing term. Each month after the tenant has vacated the space, rent is still due and payable.

Marketing subleases have been overlooked by traditional national brokerage firms over the years. Primarily because their focus is on serving existing relationships with owners of larger class A buildings. In addition, the national clients they represent allow them to generate commission dollars from tenant representation on new deals not disposing of excess space. Typically sublease assignments are farmed out to agents in markets where the national broker has affiliate offices. As a result, the referring broker is splitting commission with 2 or 3 agent's that are put on the sublease assignment. If the sublease term is short term, the agents commission is small, so the motivation to get the job done is not there.

Fox approaches the process by offering its Subleases in a transparent format. This eliminates the guesswork normally associated with traditional leasing. It allows the decision process to happen quicker. Upfront discounted pricing and a robust description of the space and terms is utilized in the advertising process.

Fox uses the traditional methods of communication including email marketing to commercial brokers and direct cold calling to tenants in the submarket.

 

Finding an Office Sublease: 7/7/2021

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.

Why?

  1. 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.
  2. 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.
  3. The Tenant is not financially strong enough to pay the Landlord the delta cost in the event he accepts your below market offer.
  4. 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.
  5. 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

Current Subleases:

1635 Market Street, Philadelphia PA 19103

1100 East Hector Street, Conshohocken PA 19428

8th Floor The Land Title Building, Philadelphia PA 19110

1180 Welsh Road, North Wales PA 19454

145 Greenwood Avenue , Wyncote PA 19095

Most Recent Sublease Transaction: June 29th, 2021

M.S. Fox Real Estate Group, Inc. is pleased to announce the consummation of two separate sublease transactions at the Spring Mill Corporate Center in Conshohocken, Pennsylvania. 

Our team successfully subleased 5,254 sf on behalf of Lucky Vitamin, the Tenant and Yeureka Home Remodeling, LLC, the Subtenant. M.S. Fox represented both parties.

Lucky Vitamin is a leader in the vitamin and supplement space offering health and wellness products at an affordable price. 

Yeureka Home Remodeling is one of the greater Philadelphia’s top home improvement companies, with a top priority of creating a client’s comfort and peace of mind. 

Additionally, M.S Fox Real Estate group also represented Cygnus Education, the subtenant, a sublease transaction of 3,750 sf from Hub International, the Tenant. Cygnus Education is the only performance marketing agency working exclusively in the higher education vertical that was founded by a former higher education CMO.  

For more information on the Subleasing of office space, contact our experts at M.S. Fox Real Estate Group for a consultation of your firm’s needs.