{"id":759,"date":"2020-07-20T00:53:00","date_gmt":"2020-07-20T00:53:00","guid":{"rendered":"https:\/\/www.realestateleads.ca\/blog\/?p=759"},"modified":"2023-09-26T16:53:57","modified_gmt":"2023-09-26T16:53:57","slug":"subleasing-an-increasingly-beneficial-arrangement-during-covid-19","status":"publish","type":"post","link":"https:\/\/www.realestateleads.ca\/blog\/subleasing-an-increasingly-beneficial-arrangement-during-covid-19\/","title":{"rendered":"Subleasing an Increasingly Beneficial Arrangement During COVID-19"},"content":{"rendered":"
<\/div>\r\n
\r\n
\"\"<\/figure>\r\n<\/div>\r\n\r\n\r\n\r\n

Being successful in business \u2013 any business, and that includes real estate \u2013 requires you to be nimble on your foot and able to \u2018roll with the punches\u2019 as the expression goes. Well, here in the summer of 2020 we are definitely rolling with the quite the collective barrage of punches known as COVID-19 and businesses of all sorts are having to do what it takes not to get knocked over. One thing we\u2019re seeing in commercial real estate in Canada is that subleasing of commercial properties is becoming a viable option for companies looking to right-size their workspaces.<\/p>\r\n\r\n\r\n\r\n

Most real estate agents in Canada works exclusively on the residential property side of things, but many may still have investor clients investing in REITs or similar investments where the commercial market is a very real part of the picture. Attracting and retaining clients is difficult at the best of times, and now even more so than perhaps at any time previous. Here at Real Estate Leads our online real estate lead generations service is an excellent way to put the power of Internet marketing behind your efforts to meet prospective clients who are genuinely ready to make a real estate move in the near future.<\/p>\r\n\r\n\r\n\r\n

But back to topic, it\u2019s an interesting development to see the idea of subleasing commercial properties gain traction the way it has, and it\u2019s yet another way to see how the real estate industry is perhaps more resilient than people give it credit for in light of what\u2019s happening in our world today.<\/p>\r\n\r\n\r\n\r\n

Subleasing has the potential to be beneficial for both the sublandlord, subtenant, and landlord. Here\u2019s how:<\/p>\r\n\r\n\r\n\r\n

Workspace Adjustment with Relocation or Vacating<\/strong><\/h3>\r\n\r\n\r\n\r\n

It\u2019s probably fair to say that right now we\u2019re seeing the largest work-from-home experiment ever, and with each instance where it\u2019s proving to be doable we are learning that a good portion of the workforce could continue to telework post-pandemic. A study in May indicated that approximately four-in-10 Canadians have jobs that lend themselves to being done from home online.<\/p>\r\n\r\n\r\n\r\n

That goes along with another report saying four-out-of-five employees would like to work remotely at least one day per week after all of this passes. Where we\u2019re going with this is that if company owners and their HR directors see the potential in having a smaller needed workspace because of fewer people working in that space, the savings that will come from leasing a smaller office space is going to be appealing.<\/p>\r\n\r\n\r\n\r\n

However, what if they\u2019re quite happy with they are and would rather keep the space while still gaining the benefits \u2013 both for themselves and their employees \u2013 that come from having many working from home. In this instance subleasing becomes an option. Subleasing allows you to offload the space you don\u2019t need and stay at the same address, while also offsetting total rent costs.<\/p>\r\n\r\n\r\n\r\n

What are the benefits for the Sublandlord? These ones:<\/p>\r\n\r\n\r\n\r\n

Retain control of the space and relationship with the landlord<\/u><\/strong><\/h3>\r\n\r\n\r\n\r\n

A sublease arrangement makes it so that a new landlord-tenant relationship is established with the subtenant and it controls all interactions pertaining to the sublease between sublandlord and subtenant.<\/p>\r\n\r\n\r\n\r\n

Relationship with the head landlord is similarly maintained<\/p>\r\n\r\n\r\n\r\n

Depending on your sublease terms and any requirements the head landlord may have for a direct agreement with the subtenant, the subtenant may not have any direct interaction with the head landlord.<\/p>\r\n\r\n\r\n\r\n

Retaining of Space Flexibility<\/u><\/strong><\/h3>\r\n\r\n\r\n\r\n

The tenant may need less square footage but still retain a level of space flexibility, and in this instance the property owner may arrange a sublease for half the space for a short term and create the separated office or production floor workspace by installing a demising wall separating the existing space from that of the new subtenant.<\/p>\r\n\r\n\r\n\r\n

Should more space be needed at the end of the sublease term, the leasee can reclaim the sublet portion of their workspace for the balance of the head lease term.<\/p>\r\n\r\n\r\n\r\n

Reduce Costs<\/u><\/strong><\/h3>\r\n\r\n\r\n\r\n

Paying rent has been such a challenge for businesses during the pandemic that the government has had no choice but to offer a commercial rent relief program. It\u2019s estimated that 21 per cent of Collier\u2019s International\u2019s 7,100 commercial tenants across Canada requested rent relief in April.<\/p>\r\n\r\n\r\n\r\n

Affected businesses\u2019 inability to pay rent is expected to remain an issue following the reopening of provincial economies, and without going into unnecessary detail for anyone who\u2019s in the situation and is in a lease for a commercial space then subleasing with a subtenant can greatly mitigate their costs.<\/p>\r\n\r\n\r\n\r\n

Subtenant Benefits<\/strong><\/h3>\r\n\r\n\r\n\r\n