Now Subletters Are Subleasing Their Spaces As `Magnitudes Of Risk Compound`

A second wave of sublease space has hit the market in Dallas-Fort Worth, a phenomenon poised to create a logistical nightmare for landlords and put imperiled properties at greater risk.

Over the past three to four months, a handful of companies that took space from another tenant have put their space back on the sublease market. Such situations have historically been rare given the risks that come with layered tenancy, but as building owners grapple with the potential consequences of lost revenue and weakened occupancy, some are beginning to bend in unexpected ways.

“Subleasing is difficult in general because you have to get signoff from multiple people, and it’s not always in their incentive to do that,” said Steve Triolet, senior vice president of research and market forecasting for Partners Real Estate.

“With a sublease of a sublease, now you’re talking about three entities, and you have to jump through a lot of hoops.”...

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RSK: This was just a matter of time before it started. There are some sweet rental rates on subleased/sublease space. But many landlords are reluctant to do so.