Maybe it’s time during your current lease when you’ve got a little extra room in your office and are looking to sublease a portion to offset some costs OR maybe it’s just time to sublease your whole space and get your entire office leased to another company. Which ever it may be for you, either process can be a bit confusing and even costly if you don’t get it right the first time around. Although office subleasing is fairly common and is a very typical business practice in today’s office market, there are advantages and a couple drawbacks to think about before signing over your space. Here are a few tips to help you through.
- Read the terms of your lease – Not all Landlords will allow you to sublease all or even a portion of your current space. While reviewing, be sure to note whether the net profits you receive from the Sublessee are split 50/50 with your Landlord. If your lease states, you have the right to sublease, knowing if you’ll be profiting or not can help you decide whether it makes financial sense to go ahead with finding a Sublessee. Also, be ready for your Landlord’s one-time fee to consent on your sublease which typically ranges from $500-$2,000 to cover any legal fee’s they’ll acquire.
- Hire a pro – Consider using a Commercial Real Estate broker, preferably a tenant representation broker, to help market and lease your space. They will charge a fee for their service but they have marketing capabilities that would be very costly for you to obtain without them. More importantly, they have a vast network and tons of connections with other tenants and brokers that will help get your space leased up faster.
- Play hard to get, don’t be picky – Being picky when it comes to choosing your Sublessee is part of your responsibility as the new Landlord of your space. While you may need the rent money you do not want to get stuck in a situation where the company you’re considering has bad credit and where you’re at high risk. Make sure they’re reputable. If you’re subleasing a portion of your office space make sure the Sublessee will have a positive impact on your brand and current company culture.
- Speak with your Landlord – Even though for most Landlords letting a tenant out of a lease is highly unlikely and sometimes even entirely out of the question, you may be pleasantly surprised to have caught your Landlord on a good day where they approve relieving you of your lease obligation. We’ll keep our fingers crossed for you.
These are just a few tips to consider while you’re thinking about subleasing your office space. On your next go around ensure the sublease clause in your lease is negotiated in your favor so if the time ever does come, you come out winning more and losing little in the agreement. Since running your business is your job let us do ours and help make this time consuming and lengthy process of subleasing easier for you. Sometimes having a savvy tenant rep negotiator is your best bet!
– Belen C.