
Subleases spike in number as SF startups downsize - dismal2
http://techcrunch.com/2016/03/08/subleases-spike-in-number-as-sf-startups-downsize/
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jorts
It may not all be doom and gloom. Landlords have been forcing long term leases
(7 years+) on tenants to get space in the city. Once a company outgrows that
space they're still on the line for that lease, so they sublease it out and
not at a major discount.

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samcheng
Right. In fact, last year at least, many companies were able to profit on
their subleases, as the long-term (4+ year) lease was at a lower rate than the
going price.

Another common situation is landlords happy to terminate a couple-year-old
lease, because they know they can easily get a higher rate on the open market.

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lquist
One data point: we signed a sublease 3 months ago at 18-20% lower than market.
This was a 10k+ sqft space in a Class A building in FiDi. Also notable: other
subleases at the time were ~10% off.

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samcheng
I don't know your particular situation, but if your master tenant signed their
lease a few years ago, 20% under market rate could still represent a good
outcome for both parties. After all, commercial rates have roughly doubled
since 2010. (See link below)

For sub-leases in particular, other (non-monetary) factors are important, for
example willingness of the sub-tenant to vacate at certain timetables, sub-
tenant palatability to the landlord, and existing prior relationships with the
master tenant.

[http://my.paragon-
re.com/Docs/General/SixtyFortyImages/7-15_...](http://my.paragon-
re.com/Docs/General/SixtyFortyImages/7-15_Invest_SF_Office-Rents_by-Qtr.jpg)

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ylhert
This article is over 2 weeks old now

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castis
Has the situation changed in 2 weeks?

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astrodust
Totally fine now. The invisible hand did its thing.

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Gibbon1
The magic market fairy gave me another unicorn.

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shostack
Is there any noticeable impact on the residential rental market though? My
assumption now is that demand will still far outstrip supply.

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toomuchtodo
Whatever slack is created by tech workers no longer in the residential market
will be picked up by Chinese buyers searching for safe asset havens.

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astrodust
Too bad Ireland can't get back in the game there to take off the pressure.

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toomuchtodo
Seriously. I love Dublin compared to SF (or even the more rural parts are nice
as well).

