Firms seeking space often search for, or eventually select sublease space available on the market.
Benefits to this type of arrangement can be significant:
- Often, space is available at a discount to typical market rents
- Sublease space often comes with furniture and other technology in place
- Subleases can be for shorter terms than the typical 5 year lease arrangement
- The transaction is typically faster, as the sublease document is usually a shorter document, subject to the prime lease already in place
However, certain potential limitations should also be considered:
- Expansion provisions typically available to a prime tenant, are not always available to a subtenant
- Renovations may not be as easy to obtain, and may have to be removed at end of the sublease
- Renewal options should typically be discussed at initial agreement and are often second to existing tenants that may wish to expand
- The financial stability is important to consider, as if they default, your sublease may be terminated or revert to the rental rates in the prime lease.
We advise a detailed review of all existing leases and amendments, confirmation of Landlord consent to the sublease, and consideration for direct renewal options at the expiration of the sublease. Please view below a summary of several sublease opportunities available. Please also reach out to us to discuss newer market options, and more transaction-specific considerations important for any sublease agreement.
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