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Top Tips for Negotiating Commercial Leases - #13 Subleases can Save a Bundle
Want to save a bundle on your next office lease? Try to find a sublease. Subleases are often priced 20-50% below what the landlord is charging for direct leases. So a building charging $20.00 may have subleases in the range of $10.00 to $16.00. The closer you get to the expiration date of the sublease, the lower the price goes.
Other factors affecting the rental rate will include how long the space has been on the market and whether furniture and equipment are available for the subtenant. Many subleases have furniture, phone systems, equipment, and maybe even art and plants in place already. While the tenant (sublessor) will try to sell these things, the subtenant will almost always ask that it all be given to the them for free as part of the deal.
But there are a few risks of taking a sublease. First, if the primary tenant stops paying the rent and the landlord terminates the lease, the sublease will likely be terminated as well. You may not have an office. So you need to underwrite the credit and financial situation of the primary tenant. The landlord could allow you to stay and just pay the subrent to him. ... more
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