Things to Consider When Sub-Leasing Office Space
The Furniture Source
6813 Shady Oak Road
Eden Prairie, MN 55344
Subleasing office space can be a benefit to a company seeking to grow or it can sound a solid death knell. There are pros and cons. Here are some things you should consider if you are thinking about subleasing office space for your business:
How long do you plan to stay in the space? This is very important because in most cases, subleases are a way for a company to offset some of its costs when it outgrows a space it is leasing. It can be less expensive than buying back the lease or breaking it. But for your business, you need to find out when the original lease is up because if you want to stay longer, then you’ll have to consider a rise in rent.
Judge the financial situation of the company subleasing you the space. If they default on the lease while you are a tenant, the building’s landlord could throw you out or offer you a direct leasing agreement, in which case your rent will go up.
If the company leasing the space does default, can you pay directly to the landlord? This will require some negotiation skills because the landlord may want the full amount of the lease payments.
Go over the original lease with a fine-tuned comb. What obligations does the lessee have and will those be transferred to you?
Get a list of sublease restrictions early on in the negotiation process. Otherwise, you may find yourself spending months in negotiations only to find out you can’t sublease the space after all.
Subleasing office space can be beneficial, especially if you are a new company or a small company looking to grow, but make sure you understand the risks, and do your due diligence.
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