Sublease Accounting Nuances

December 20, 2023Insight
Going over deal papers

Many of TRA’s clients have privately expressed frustration at large publicly traded and private equity backed tenants noting that these tenants put a space up for sublease but do not actively seek to fill that space. These companies continue paying the landlord the contract rent for the duration of the lease, so economically in the short-term, there is no impact to the landlord, but long-term it leaves landlords without a lead on a new direct tenant and could result in greater inventory hitting the market in the coming years.

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