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Subleasing: Thin Rates, Thick Documents

SAN DIEGO-"The sublease market is really a mixed blessing," says Ron Magnaghi, senior vice president with Irving Hughes.

By Randyl J. Drummer | Updated on November 29, 2001

SAN DIEGO-It may be a tenant’s market these days, but the current sublease market has its drawbacks even for those landing great deals, according to Ron Magnaghi, senior vice president with Irving Hughes, a tenant representation firm.

“The sublease market is really a mixed blessing,” Magnaghi says. “Rates may be lower, but there’s a higher risk for everyone involved. And as involved as primary leases are today — it’s nothing for primary lease documentation to be inches thick — the sublease is often an even more complex arrangement.

Moreover, hundreds more businesses that could face closure for lack of reinvestment in the coming months, he says. There are many new buildings under construction that are nearing completion, and a serious amount of true vacant space for which to account.

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