Lastly, remember that in the large majority of cases, a
sublease requires the consent of the "master landlord"--so your landlord, who is a tenant under a master lease, is obligated by the terms of the master lease to get the master landlord's consent, and that consent is an important pre-condition to the effectiveness of the
sublease.
Identify a potential subtenant and establish key business terms: Once you've spoken with your landlord and you are certain that you will be pursuing a
sublease, the next step is to sketch out the key business terms of a
sublease arrangement (rent, term, etc.) and identify a potential subtenant.
Garcia says that while sublessors often undersell face-market rates in Class A and B buildings by as much as 25 percent, potential
sublease tenants must be willing to accept some compromises.
FM directs the BK1 affiliate to pay BK1 annual amounts equal to 90% of FM's annual rent obligation under the
sublease (i.e., amounts sufficient to satisfy X's debt service obligation to BK1).
Given economic parity with a
sublease, the freedom of lease termination beckons alluringly.
* Tech tenants finalized
sublease agreements an average of 8.8 months after a space was listed, while non-tech firms took nearly 2.5 months longer on average to acquire their space;
A
sublease transfers less than the entire term and interest in a lease.
"I think that the tenant world has become very astute," Turchin said; instead of offering up the back office, tenants looking to
sublease are now offering the most marketable space they can, and they're offering more appropriate terms and build-outs.
Some may be marketable next year, some situations may change next year," he said, but "not [all] the
sublease space is going to go first [just] because it is priced cheaper."
But that trend was short-lived; rents on
sublease space quickly fell in the next quarter.
Between July and December 2008, available
sublease space in Manhattan rose to 11.2 million square feet from 7.2 million square feet, according to CB Richard Ellis.
The company will be rolling personnel into 1345 and an office in White Plains from another Manhattan location that it occupies, 135 West 50th Street, where it is planning to
sublease space.
