In other words, if you only
sublease a portion of your sublandlord' s premises, and your sublandlord, as the tenant under the master lease, defaults under that master lease -- your
sublease is at risk and can be terminated.
Talk to your landlord: When considering a
sublease, transparency is often your friend.
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.
In this form, the consent to the
sublease should in no way release tenants from any of the covenants, agreements, liabilities and duties under a lease.
According to information provided by Colliers Commerce CRG, 879,000 square feet of office space was available for
sublease in December of 2002, accounting for 3.42 percent of overall market vacancy Although tenants have been responsive to the attractive deals available, and close to a half-million square feet of
sublease space was either absorbed or returned to landlords over the course of 2002, the amount available at year's end exceeded figures posted in 2001 by 60,000 square feet.
Both loans are nonrecourse, have fixed interest rates and provide for annual debt service payments that fully amortize the loans over the
sublease's 20-year primary term.
Tenants who are faced with the problem of excess space can either
sublease the space or terminate its lease.
* Tech firms have an average
sublease term of 4.4 years, one year shorter than the average
sublease term for non-tech tenants;
The dot-com bust has sent
sublease markets soaring.
The Avenue of the Americas space also came on and off the market in a matter of months, Turchin said, an unusually quick turn-around for
sublease space.
About 70 percent of the approximately 10 million square feet of
sublease space available in Midtown has too few years left on the lease and/or is too large to be leased, Powers estimated at the firm's quarterly market analysis meeting.
Asking rents on
sublease space were just 2.7% lower than direct space, the tightest spread since the second quarter of 2002, well below
sublease rents' historical average discount of 8.1%.
