Sublease Office Space FAQ
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What is a Sublease?
A sublease is a contractual agreement transferring some of the original tenant’s rights to a new tenant. In exchange for these rights the new tenant promises to fulfill certain obligations: pay rent, pay utilities, etc. A person chooses to become a subtenant because a sublease often meets the tenant’s needs by offering a shorter lease term, furnished unit, reduced rent, and more negotiable terms. The length of the sublease is typically the remaining term of the prime lease (the original lease between the existing tenant and the property owner).
Is a Sublease a Good Solution for My Office Space?
One of the best options a company could find is found in this kind of submarket. You have a highly motivated Landlord (sub-landlord) with an uncommon desire to do whatever he can to cut his losses from a lease he no longer needs or wants. Rent rates are typically anywhere from 20%-30% discounted up to as much as over 50% discount from the face rate of what the tenant is paying. Many sub-landlords will offer free rent, office furniture and cubicle farms, telephone systems, computers and just about anything you could think of that involves the rented environment. In many cases yours for the keeping provided you satisfy all the terms of your sublease agreement.
Advantages to Sublease Office Space
- The Landlord is often motivated to make a deal below current market rates.
- Sublease space often comes finished, furnished, and ready to go. For those looking for immediate move in, a sublease can be a great option.
- Sublease tenants may be able to get space in buildings that they might not be able to afford with a traditional lease. For instance, the ability to locate in a class A building versus a class B building.
Disadvantages to Sublease Office Space
- If the sub-landlord defaults on the prime lease, the subtenant may lose the right to occupy the office space. Diligence is required on the front end of negotiations to avoid these types of problems.
- The subtenant often has to go through the sub-landlord regarding any issues that arise that involve the building. The inability to go directly to the landlord on issues can be annoying. It is important to find out upfront how these issues are to be handled.
- A sub-landlord usually offers the office space in as is condition. When negotiating a lease directly with the landlord, they will often offer tenant improvement allowances. If the office space is exactly what you want, this is not an issue.
- The sublease will eventually end and the landlord will likely want market rate for the space. The subtenant should consider if they will be able to afford the space when the sublease ends.
OfficeSpaceAtlanta.com can help you find the perfect sublease office space in Atlanta. Contact us or fill out the find your office now form to get started.