The Commercial Conundrum
In an article written for Best Lawyers, co-chair of Pullman & Comley's Real Estate, Energy, Environmental and Land Use practice Brion J. Kirsch provides a primer for landlords of commercial real estate on how to move forward with increasingly vacant buildings to fill.
With significant changes in commercial real estate accelerated and exacerbated by the COVID-19 pandemic, many tenants seem to be reevaluating their needs. With the rise of remote and hybrid work, many companies no longer need the same amount of space that they required pre-pandemic. "This has led employers who also face inflation and increased overhead generally, including increased employee wages and utility bills, to wonder how to cut back—including how to reduce expenses and give up some of their office space," Brion said.
After examining their needs based on current and anticipated circumstances, the landlords and tenants can explore options on modifying their lease, partially assigning the lease or subletting a portion of the premises.
“Most commercial office leases allow partial assignments and subleases only with the consent of the landlord—so the initial step for tenants is to have a conversation with the landlord, explain the circumstances and try to reach an agreement that will allow the tenant to market a portion of the space for a partial assignment or subletting,” Brion writes. “Once consent is obtained, and an assignee or subtenant is found, there are still legal and practical considerations that need to be addressed.”
Learn more by reading the full article on www.bestlawyers.com.