With the unique pressures that COVID-19 is placing on the business world, it's not surprising that some companies are looking at vacating their space and putting it on the sublease market. At the same time, landlords are getting more aggressive about leasing out their direct space, and many of the tenants that aren't actively shrinking aren't looking to make changes, either. With all of these factors working against you, finding a subtenant can be especially challenging today.
That being said, it isn't impossible. Here are four tips that will help you in today's tough market.
Have the Right Brokerage... Strategy
The first step is to make sure that you have the right brokerage strategy to get the transaction consummated, and this step has three parts.
-
Landlord alignment. First of all, if you want to sublease out your space, your landlord is probably going to need to consent. Before you start the process, feel him or her out to make sure that they will be a good partner. If you have concerns, consider reaching out to your attorney for advice on your rights under your lease.
-
Have a broker... On the subject of attorneys, Abraham Lincoln said that an attorney that represents himself has a fool for a client. This is equally true with commercial real estate. If you're going to sublease out your space, you need a tenant rep broker. Period.
-
...Who's doing the right things. But you don't just need any broker. You need one that will give you the time and effort that you deserve and one that understands what it takes to lease out space in today's market. Instead of looking for growing companies, you might need to look for shrinking ones. And they need to be able to articulate that the drawback of subleased space -- that's it's short-term and frequently as-is -- is a benefit for a company that doesn't know what the future will bring but needs something now.
Ask For the Right Rent
Leasing or subleasing space isn't like selling space -- it's like selling airplane tickets. With a building, if you don't sell it today, it's still here tomorrow. With an airplane ticket, though, you can't sell a seat on Wednesday's flight on Thursday -- that ticket is perishable and time is of the essence. Leased space is the exact same thing -- if you don't get a tenant in, you can never rent out that month once it's passed. For this reason, pricing high in the hopes of getting a needle in a haystack tenant is a bad strategy. Do what it takes to get prospects in the door and signed up. Giving up 50 cents or a buck or two per square foot in your annual rental rate is almost always well worth it to get two or three extra months of rental income, after all!
Do the Right Marketing
Especially now when people are still cautious about venturing out due to COVID-19, your marketing materials really matter. This starts with professional photographs that show the site in the best possible light. But, today especially, it continues with a requirement that you have as much video footage as possible. Walkthroughs, drone videos of the interior and exterior, and, if possible 3D virtual reality walkthroughs all help make your site stand out. Remember that it is hard for many prospective tenants of your sublease space to visualize what you have to offer, so the more you show them, the more they can envision themselves in your space -- instead of in someone else's.
Hold the Right Showings
In most parts of the country, showings are still happening, but they're different than they were pre-COVID-19. Work with your broker to make sure that the showings they provide strike the right balance between safety and social distance and showpersonship.
Staging the space with the lights on and the doors propped open can help, as can planning pitches and discussions before before and after the tour in an open area, instead of during the tour where prospects might be uncomfortable talking in a closed room.
Wondering where to begin?
Related Content
Subscribe to Our Learning Center
