After years of leasing office space by far the most rewarding type of leasing is Dallas office subleases. There are two main reasons that I enjoy this type of commercial brokerage.
- The Sublessor (Tenant) usually has a space they do not want and they are looking for some type of financial relief from their lease obligation.
- The Sublessee (Sub-Tenant) is usually looking for a below market leasing opportunity with a shorter term lease.
Opportunity Is Everywhere You Just Need To Know Where To Look
My opportunity is to help both sides negotiate a quality Dallas office sublease that will be approved by the Landlord. There are a few things that both sides need to take into consideration before they enter into a sublease contract.
- The master lease usually has a sublease clause that must be fully understood before the potential sublessor places the space on the market.
- Has the prospective sublessee already had contact with the landlord’s leasing agent? Some sublease clauses prevent the tenant from subleasing to a prospective subtenant if the landlord has already had contact with the prospect.
- Even though a sublease is agreed upon by the sublessor and subtenant the landlord has the right to approve the sublease and can reject the sublease. It is most important to have the landlord’s approval on every sublease.
- The subtenant must get a copy of the master lease and all addendum’s because the landlord will expect the subtenant to honor the terms and conditions established master lease one of which that needs to be taken into consideration is the master lease’s insurance requirements.
Timing Effects Dallas Office Subleases
Timing is an important consideration for both parties but especially for the prospective subtenant. Once the sublease is agreed to by both parties it will then be presented to the landlord for approval. The landlord will usually want the following items from the prospective sub tenant.
- A current balance sheet and two years of cash flow statements
- A summary of the history of the company and its business
- Information on the subtenants officers
After the landlord has the sublease and the requested subtenant information they will review the information. One of their considerations will be to determine of the have another prospective tenant that would like to occupy the Dallas office sublease premises for a longer term lease, which creates more value for the landlord. Unfortunately it can take a few weeks in some instances to get the landlords approval but in most cases approval usually comes within five days.
Getting Ready To Move Into Your Space!
While the subtenant is waiting for approval this is a good time to contact your insurance agent and ask them to get everything ready to process your insurance request when the landlord approves the sublease. Most landlords will not let a subtenant occupy the premises until they have a certificate of insurance that is compliant with the master lease. It isn’t fun to show up with a moving truck and be denied the opportunity to occupy the building because of failure to have a certificate of insurance.