Subletting Office Space

Subletting office space is common among commercial leaseholders. Because the terms of a commercial lease are strictly legally binding, it is often quite difficult to terminate a commercial lease before it expires. If a business ceases operation, moves to a new location, or reduces its required number of offices, leased office space is often subleased to another company. In some cases, commercial subtenants may share office space with the original leaseholders, while in other cases subtenants may completely take over all of the available office space. The financial crisis that began in the United States in 2006-2007 led to a number of businesses vacating their leased properties. Subletting office space in turn became more and more common as original leaseholders continued to go out of business. This led to a dramatic decrease in the asking prices of sublease space. Subletting office space became difficult for leaseholders in many areas, causing many commercial properties to be left sitting vacant.

Fast Facts

  • In early 2009, New York City financial service firm's subleases were being offered at up to a 79% discount to current market taking rates.
  • In early 2009, there was approximately 10.3 million square feet of commercial sublet space in Manhattan.

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