Affordable Prices Push Active SubLease Market In Manhattan ...
Conventional wisdom holds that subleasing in which tenants vacate their offices before the end of their lease and rent it to another tenant at a discount has a negative impact on the market. The amount of sublease space available has declined, the research shows, as 21 percent of all office space on the market in the first half of 2011 was available for sublease, compared to 30 percent in 2009. The most coveted office space, in city towers above the 25th floor, is on the market for an average of 8.5 months, 3 months less than space at the 10th floor and below.
Yet despite these positive signs for those seeking sub-tenants, subleases are actually getting snapped up so quickly because of weaker price points compared to the direct-lease market. Many tenants that have recently converted sublease space into direct leases, a trend that is being driven by the tightening commercial real estate market. The disparity sat at 25 percent for the first half of this year, thanks to the improving commercial office leasing market,
But the industry perspective is now shifting.Tenants are embracing subleases as a means of locking in below-market rents, while landlords, who are facing fewer vacancies, are using it to attract tenants and then converting the leases into direct deals when the subleases expire.
During this downturn, however, sublease space may have proved to be somewhat less of a drag on the market
http://therealdeal.com/
What is sublease? when a tenant let out the whole or part of the property rented by him a to a third person it is called 'sublease'. Even though it is rented out fully, the first tenant will be responsible for payment of rent and all charges to the landlord and he is also responsible for all loss caused by the sub lessee to the property. There is no agreement with the landlord and the sub-tenant. The landlords generally discourage such sub-leasing by banning it in the lease agreement.
No comments:
Post a Comment