Subleasing of the unused space brings you additional income!
There are usually strict conditions upon the tenant's right to sublease or otherwise alienate themselves from a lease for many good reasons. It's very important to understand the terms and conditions of each right to avoid unintentionally breaching the terms of your lease. This often happens when tenants share space informally without obtaining the necessary consents from the landlord. While the consent process is sometimes quite involved and includes a fee payable to the landlord for processing the application, it is difficult for a landlord to reasonably withhold consent in most circumstances.
Subleasing of your premises is much easier with a professional assistance!
Professional advice should always be sought on subleasing and is typically essential for listing a lease as available, finding and negotiating with a subtenant or assignee and managing the process. Most importantly, the financial standing and operations of a prospective subtenant must be fully evaluated to determine the level of risk associated with the transaction
In today's market, many businesses actively seek out subleases for the perceived value they offer over a direct lease.
There is always a risk with subleasing. Not only do you have to determine if the subtenant can afford their rent payments and deal with effectively becoming a "landlord" but you are responsible for the subtenant's compliance with all your lease terms too.
Hence, the demand for subleasing is currently stronger than it has been in several years. However, this is offset by the high supply of sublease space. Therefore, it can take several months of aggressive marketing to secure a suitable subtenant.
Furthermore, the likelihood of receiving 100% of your rent is slim. Subleases are often as much as 50% cheaper than new leases and with commercial real estate rents having fallen considerably over the past 18 months, most tenants marketing space for sublease are already paying up to 30% over the fair market value of their lease. Nonetheless, subleasing remains a popular and effective way of significantly reducing occupancy costs.
If you want to know more, don't hesitate to contact us!
