Commercial Lease Assignments and Subleases: Negotiation Strategies in a Troubled Market

Best Practices for Landlords, Tenants, Subtenants and Assignees to Avoid Legal Pitfalls

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Thursday, March 25, 2010

Recorded event now available

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Course Materials

This CLE course will provide best practices for counsel to landlords, tenants, subtenants and assignees to negotiate and craft subleases and assignments in the current market. The panel will review the benefits and risks of assignments and subleases of commercial leases and the legal distinctions of each option.

Description

Commercial tenants continue to vacate leased space in record numbers. Some tenants make good faith efforts to transfer their leases to other businesses via assignment or sublease. Business owners view this trend as an opportunity to find better space with shorter terms and lower rents.

Landlords, tenants, subtenants and assignees must analyze the advantages and disadvantages of each option in deciding whether to sublease or assign a lease. There are implications for each party under tax and bankruptcy codes, contract law, landlord-tenant law, and financial reporting requirements.

Subleases, more complicated to negotiate than assignments, involve a number of potential legal pitfalls for the parties. Relying on boilerplate language when entering a sublease is a dangerous mistake with costly consequences for all parties.

Listen as our panel of real estate attorneys examines the potential legal pitfalls of negotiating commercial subleases and assignments and offers strategies for landlords, tenants, subtenants and assignees when negotiating assignments and subleases in a still depressed real estate market.

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Outline

  1. Current market trends
    1. Supply vs. demand
    2. Lease terms and renewals
    3. Tenant bankruptcy
  2. Distinctions between assignment and sublease
    1. Legal differences
    2. Drafting differences
    3. Pros and cons of each option
  3. Key considerations/best practices when negotiating assignments and subleases
    1. Landlord perspective
    2. Tenant perspective
    3. Subtenant/assignee perspective

Benefits

The panel will review these and other key questions:

  • What are the most significant legal differences between a commercial sublease and assignment?
  • What are the primary concerns for tenants considering subleasing their current space?
  • What lease terms should subtenants be most concerned about when negotiating a sublease?
  • How can a landlord respond when a tenant breaches a prohibition on assignment or subleasing?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Dorothea W. Dickerman
Dorothea W. Dickerman
Partner
McGuireWoods

She has more than 25 years of experience in commercial real estate law and real estate finance. She has extensive...  |  Read More

Ruth A. Schoenmeyer
Ruth A. Schoenmeyer
Of Counsel
Jenner & Block

She has extensive experience representing landlords and tenants in leasing transactions, including leases relating to...  |  Read More

Elizabeth K. Cooper, Esq.
Elizabeth K. Cooper, Esq.
Managing Director - Brokerage
Jones Lang LaSalle

She co-chairs the company’s Law Firm Group and leads the Strategic Transaction Service Group. She has completed...  |  Read More

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