What is Subleasing?
When a tenant is in the middle of a lease contract and locates another company willing to take over their lease. Subleases are often 15-35% below market rates and leased on an as-is basis.
The Master Tenant remains 100% responsible for the lease obligation, even though the new Subtenant may be paying for rent. Most lease contracts provide the right to sublease, pending Landlord approval.
Benefits of subleasing vs. direct leases – Why you should consider a sublease
- 15-35% Lower cost (on average)
- Shorter time commitments
- Lower credit requirements
- Furniture, phone system and equipment often included with the lease
Risks and drawbacks for a subtenant
- Lease start can be delayed with 3 parties involved in the process (Landlord, Master Tenant, Subtenant)
- Master Tenant default can cause Subtenant to be without a valid lease
- Master lease terms are not negotiable
- Rights to renew often do not transfer to the sublease tenant
- Space normally leased in “as-is” condition with no tenant improvements
- Subtenant may have limited rights with the landlord
- Subtenant could be exposed to a much higher direct lease rate upon expiration of the sublease.
The Sublease Process: From the Subtenant’s Perspective
1. Find and negotiate the financial terms of the sublease with the existing “Master Tenant”
2. Submit financials and company information for Master Tenant and Landlord review<
3. Review the master lease document (between Landlord and Master Tenant)
4. Negotiate the sublease document (between Master Tenant and you)
5. Get landlord approval for the sublease
6. Sign sublease documents & write checks for first months rent and deposit
7. Vendors ready the space for your occupancy<
8. Move-In & begin paying rent to the Master Tenant
Need to sublease your space?
- We can help you get the most exposure for your available office sublease and get it leased up fast
- Your featured listing will appear on the front page of this site and AustinOfficeSpace.com (#1 Google ranked)
- A marketing flyer will be created for brokers and prospects
- Your listing will be added to all the top commercial real estate databases
- Local brokers will be regularly sent E-mail blasts with your availability
- Your agent will field all phone calls and tour prospective tenants through your available space
- We will help coordinate the Landlord sublease approval process
- We will facilitate the sublease contract negotiation, preparation and completion