Last week, the NY Post published an article highlighting a sublease opportunity on Park Avenue for only $25 per square foot, one of the hundreds of spaces that have been listed for sublease with discounts ranging from 25-75%.
While these spaces align perfectly with some firms needs, it's important to understand why subleases carry such significant discounts and evaluate accordingly:
- subleases generally entail fixed lease terms with limited flexibility (in the case above, an 18-month term for over 28k SF)
- sublandlords can't offer renewal/expansion options and usually don't provide any funding for work
- especially on shorter terms (< 3 years), the space is often offered as-is
Most importantly (and even more so in this market), the sublandlord's credit is a big questions mark:
as a subtenant, you can be evicted if the sublandlord stops paying their rent!
Now more than ever, landlords have begun to meet the market with the stability of a direct lease combined with the same flexibility offered by flex-spaces providers.
Over the last several months, we've seen direct deals signed with a wide-range of flexibility: 2 year terms, fully wired & furnished suites, and all-in-one pricing structures, among many others.
If your team is evaluating its options and looking for discounted space with term flexibility, it's worth considering direct spaces that can offer the best of both worlds.
