You need less space

The problem

Paying for empty desks or an empty back room is money out the door every month. Just stopping paying isn’t an option: the lease and often a personal guarantee are still there. A sublease or assignment that’s done carelessly can leave you liable for someone else’s rent.

What I do about it

I look at every exit: giving back part of the space, a sublease, an assignment, a negotiated early termination, or a blend and extend that trades a longer term for less space or lower rent. I check what your lease allows, price each option, and handle the conversation with your landlord.

What your landlord wants

A landlord wants their income protected and a good tenant in the space. They’ll often take back space they can re-lease, or agree to a change, if it doesn’t leave them with a hole in their rent roll. What they don’t want is a surprise or a tenant who stops paying.

Where everybody wins

Bring the landlord a clear plan. When the answer protects their income, you can usually get the space or the cost down to what the business needs.

Know your number first

Add up the rent and additional rent left on your lease. That’s your exposure, and every option is a way of reducing it. A space with 14 months left is a very different problem from one with six years left.

The main options

• Sublease part or all of the space. You stay on the hook to your landlord, but a subtenant covers some of the cost. Subleases often rent below direct deals, so plan for a discount.
• Give space back. If your space can be split, some landlords will take part of it back, especially if they have a tenant who wants it.
• Restructure. A longer term on a smaller space in the same building can suit both sides.
• Assign the lease. If someone takes over the whole lease, ask for a release. Without one, you may still be liable if they don’t pay. More in assignment and sublease.
• Move to a smaller space and deal with the old lease using one of the above.

How your landlord sees it

A landlord who already has empty floors may not want yours back. A landlord with a waiting list might be happy to take it. Knowing which one you have changes the whole approach. How landlords think goes into this.

If a sublease or assignment won’t work, you may be able to negotiate an early exit with the landlord. See lease surrender.

Questions people ask

Can I sublease my office space in Vancouver?

Most commercial leases allow subletting with the landlord’s consent, which often can’t be unreasonably withheld. Read the clause carefully, since some leases let the landlord take the space back instead or share in any profit.