I’m Looking for Office Space - Should I Consider a Sublease?
25th February 2015
By: Jeff Jacobson
“May I have the definition, please?”
noun, a lease of a property by a tenant to a subtenant.
Sublease. Okay, sounds pretty simple, right? Not so fast.
There are two steps to executing a sublease 1) finding a sublease opportunity and 2) legally executing a sublease when an opportunity is found. The first step is very hard and the second step can get very expensive.
Traditionally, there has never been an aggregated list of sublet opportunities. You either ask friends or family if they know someone who has extra space or you visit Craigslist to search for opportunities (we talk about the downside of renting space via Craigslist here).
If by chance you find an opportunity to sublease space, congrats! However, you'll need to jump through these hurdles to actually get the sublease executed:
- Does their lease contain a clause prohibiting subleasing?
- If subletting is allowed, does the landlord or tenant require specific requirements of the subtenant (corporate guarantee, personal guarantee, insurance, etc.)?
- Does the tenant have a sublease agreement? Either way, you will need an attorney to review. This costs time and money.
- Most spaces will need to be customized or built-out to certain specifications to be ready for you to move-in. More time and more money.
What you thought was going to be a seamless and inexpensive process has now turned into a three month ordeal and is getting very expensive. Because emerging companies need flexibility when it comes to real estate commitments, this antiquated sublease model, as well as the traditional lease model, needed to be re-imagined.
Kinglet, launched in the Fall of 2014, is an online marketplace for office space that has drastically simplified this process. Kinglet curates unique office spaces from both landlords and businesses with extra space and makes them accessible to emerging companies. Kinglet uses standardized license agreements, all-inclusive pricing, and online transactions to streamline a process that used to take months down to a matter of days.
License agreements provide more flexibility to both landlords and tenants and are permitted under most leases. Using Kinglet, companies can commit to only the space they need and grow on-demand.