SUBLEASING IN TODAY’S MARKETPLACE
Subleasing in today’s market is commonplace. There are a variety of reasons why firms sublease their excess space. However, for those who intend to sublease, some caution is appropriate.
Make sure to check on the credit and payment history of the firm subleasing the space, particularly if they will pay any part of the gross rent due and payable to the Prime Landlord.
Carefully read and understand the tenant obligations under the Prime Lease. This is often an attached exhibit to the sublease document. The Subtenant’s obligation is to comply with the terms of the Prime Lease.
Make sure to receive the Prime Landlord’s formal approval, in writing. Sometimes this is as simple as a signed consent note on the signature page of the sublease document. On the other hand, the consent form can be several pages. If the Prime Landlord’s consent in the Prime Lease is something other than “reasonable,” make sure to understand what the “other” stipulations are.
If modifications are made to the space, understand the obligations in respect to the lease. Removing modifications may be a requirement upon termination of the sublease.
Make sure the life safety and exiting requirements meet local codes. Often times, a space carved from a larger space does not meet the proper exiting requirements, which may mean extra costs.https://paramountre.com/agent/phil-simonet/
For more information on subleasing space, reach out to our experts:
Phil Simonet, Principal | John Young, CCIM, Vice President | Nancy Powell, Vice President | Jeffrey Swanson, Associate | Joseph Schultz, Associate | Jack Buttenhoff, Associate