Can you sublease your office and if you can't why?
You may be asking yourself , what am I going to do? Things are tough and I can not afford my office lease anymore, can you sublease your office?
There are some key elements to look for in your original lease. When you want to sublease your office, you will need to see if the language in your lease is tenant friendly or not? Here are some things to look for:
You can sublease your office based on language that essentially says that the landlord can not unreasonably withhold your request to sublease your office.
You may have a buyout clause in your original leasethat will allow you to sublese your office and then pay off the remainder of your lease based on a set term. An example would be if you have a 3 yr term and you occupied your office space, say for 1.5 years. If the language says you an option to buyout the lease after 18 months, you may choose that option or have someone else lease your space for the remainder of the term and deducting their portion of the rent from what you owe on a buyout.
It is important to note that for you to sublease your office, you will have to review the language that is specific to your lease.
How are office subleases are marketed? Typically, you will not be allowed to have signage on the street advertising your office space for sublease, however there are exceptions. For those exceptions you will have to speak to your landlord and review your lease to see if there is prohibitive language in place around advertising your office sublease.
A good commercial real estate broker can help you market your office space for sublease. Subleasing office space depending on the market conditions will usually be below what you are paying, new potential tenants called sub lessees are looking for deals. In the office sublease transaction, you become the sub-lessor or the landlord to the new tenant. You are still responsible for paying your rent on time to the landlord.
Some non friendly office sublease language may say that if you are in default , the sublessee (new tenant) has to belly up to the bar and pay your original agreed upon rent in the lease document. This makes it tough to market your office space for sublease because a new tenant does not want to be responsible for you defaulting on your office lease.
Also keep in mind if you want to sublease your office space, you will most likely have to market it as an "as is" layout. If you have a unique business model and extensive finish out that was done , it may take more time to sublease your office space because you have to market it to a like business.
Subleasing your office space can take up to 6 months or more, so be patient. With your office competing against other offices for lease, as well as offices for sublease you will want to make sure you have a good comparative market analysis to see what rates you should be asking to sublease your office space.
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