Get Landlord Rich, as a Tenant - The Power of Subleasing
Updated: Mar 27, 2019
Article originally published by Eric R. Smith on LinkedIn
Thought you might enjoy this case study as it gives thought to how businesses can actually make money on their lease, save occupancy costs and expand in the future.
I'm posting in a case study format that might be a little more difficult to read, but the take away is this - subletting a portion of your space is a great way to save money. My client did it and is actually cash-flowing on the sublet portion. See below...
Client: Cardno, Inc.
Address: 5622 Research Dr., Huntington Beach, CA 92649
Time Frame: 5 year lease, 1 month downtime to sublease
Result: Leased a 9,600 sf Industrial building and subleased the back half of the unit. As a tenant, is now cash flowing $905.52/month on the back unit. Has the opportunity to expand into this unit if necessary in the future.
To secure an ideal West Orange County Industrial location for an International utilities conglomerate, Cardno, Inc. Voit Real Estate Services identified multiple locations in a competitive market and urged Cardo’s local team to consider an entrepreneurial opportunity to lease twice the required space in advance of their growing business unit. Within the selected site, Cardno Inc. could potentially sublease the back unit and reserve it for future growth. This also capitalized on the price break of the size difference; leasing a 10,000 sf building was $.10/sf cheaper than leasing 5,000 sf at the time.
To date this strategy has allowed Cardno, Inc. to occupy a highly desirable building, make money as a sub-landlord and reserve the right to expand in the future.