The office market is seeing a lot of movement lately, and one trend we’re noticing is a surge in available sublease space, especially in certain cities. We just saw a piece from CRE Daily about Austin, where a “sublease glut” is creating both opportunities and some serious risks for businesses looking for new space. While a sublease can look like a great deal with below-market rents, it’s crucial to understand what you’re really signing up for.

The core risk is this: if you’re a subtenant, your lease agreement is with the original tenant (the master leaseholder), not directly with the landlord. If that master leaseholder defaults on their own lease, or decides to exit it entirely, you could find yourself in a tough spot. Suddenly, you might lose your space with little or no recourse, even if you’ve been paying your rent diligently. This isn’t about blaming anyone; it’s simply how the legal structure works. You’re essentially piggybacking on someone else’s primary agreement, and if that agreement falls apart, so does yours.

Before jumping into a sublease, it’s worth doing your homework. Understand the financial health of the master leaseholder, and ideally, try to get a direct agreement or “non-disturbance agreement” from the building’s landlord. This kind of agreement protects you by ensuring your tenancy continues even if the master leaseholder’s agreement ends. It’s a small detail that can make a huge difference in your security. We’d love to hear if any of you have navigated this situation, or if you’ve found ways to secure a sublease safely.