The Ins and Outs of Commercial Subleasing
How it benefits both parties.
2 min read
More often than not, leasing commercial real estate comes with a hefty price tag. That is why it is common for those looking to lease a property to consider leasing a part of the property to another party. This is called subleasing—and it can be beneficial for both the existing (sublessor) and potential tenant (sublessee).
Similar to a commercial lease agreement, a sublease is a standalone agreement between the existing tenant and the new tenant that outlines the lease terms, including the duration of the lease, the price of rent, and any other associated costs. The agreement does not negate the terms of the original lease between the tenant and the property owner.
Commercial subleasing offers various benefits for both the sublessor and the sublessee, such as:
Lower costs: Rent prices for subleases are often less than a standard lease. This is ideal for smaller businesses looking to lease a small space. This can also help reduce sublessor costs as they will now share the facilities and amenities.
Lease flexibility: Subleases tend to be for roughly six to 24 months, making it ideal for businesses who are only looking to lease for a shorter period. This can often be attributed to the fact that the existing tenant will be partially through their current lease.
Networking opportunities: Believe it or not, subleasing is a great networking opportunity, especially for businesses that work within the same industry. This can help both parties grow their referral base and possibly cross-promote.
When considering subleasing a commercial property, it is important to note whether your current lease agreement has the option to sublease before proceeding. This will help you avoid any possible contract violations.
Reference
The Pros and cons of commercial subleasing: Tenant CS blog. RSS. (2022, May 10). Retrieved May 31, 2022, from https://www.tenantcs.com/blog/commercial-subleasing
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