Owners Are Turning to Technology to Fill Sublease Space
Sublease space increased 52% last year, and owners are looking for creative ways to lease space.
The sublease market exploded during the pandemic. As companies moved employees offsite and shut down offices, they looked to shed unused space through subleasing. Alpha Lease Management CEO Phil Raglin says that the sublease market is going to become a new normal in commercial real estate.
“We believe that subleasing is here to stay, particularly in light of companies’ shifting space needs as a result of the pandemic. That said, there are creative ways to sublease that benefit owners greatly and reduce the burden of vacancy,” Raglin tells GlobeSt.com.
The company’s Tenancy on Demand program helps owners manage and sublease vacant space while taking the owners long-term goals under consideration. “Landlords pay an agreed-upon fee and are in return guaranteed a stable long-term tenant with the expertise to operate the space and add deep value,” explains Raglin. “This type of partnership also takes the risk out of each space because we guarantee the long-term lease, which leads to an immediate increase in NOI. The sublease arrangement delivers flexibility to the owner or investor to recapitalize, reposition, or otherwise reinvest the asset.”
Filling vacant space through a sublease helps to stabilize an asset, and ultimately add value. That company also has proprietary ALPS algorithm to identify other ways to add value to a property. “The tool intakes the relevant property and contact information needed to complete our assessment of a specific property,” explains Raglin. “Then, the information from ALPS is used to discover what value-add solutions we are able to offer owners and investors. There’s no fee or obligation to use this tool.”
The company works with owners across asset classes and property types to find ways to enhance a property’s stability and value. “Our firm has more than $45 million in transactional volume to date, and our expertise and investment span the four commercial real estate food groups of retail, office, multifamily and industrial/flex properties,” explains Raglin. “We focus on the top 30 U.S. metros and currently operate in more than 23 markets nationally.”
Owners who utilize the feature receive a report with value-add solutions, including ways to increase ROI. Raglin says, “It is the way of the future.”