Subleasing is very popular during a down economy. You can find great space at a reasonable price. Subleasing, however, during this economy, can be fraught with peril. If the company from whom you are leasing defaults under its lease, the landlord has the right to terminate the master lease along with your sublease. This problem can arise when the main tenant is paying 20 dollars a square foot and the subtenant is paying 15 per square foot. If the main tenant’s business is struggling and they cannot make up the $5 per square foot and defaults under the main lease, the landlord may or may not want to honor the sublease. You should think twice about a sublease at a lower rate as opposed to a straight lease at a higher rate given this potential scenario.
Your Sublease Can be a Risky Proposition, guest post by Justin Daniels, Atlanta Real Estate Attorney
About Justin Daniels
Justin S. Daniels is the trusted legal quarterback providing corporate and commercial real estate advice to fast growing privately held entrepreneurial businesses. He practices law as a shareholder with the firm Wagner Johnston & Rosenthal, P.C. Justin's corporate practice consists of representing businesses and business owners in all aspects of their operations from structuring new ventures, advising on acquisitions and divestitures and reviewing and negotiating key vendor, franchise, employment and customer contracts. He has represented a variety of clients in the manufacturing, retail, professional services, consulting and technology industries.Subscribe
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