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>A business is stuck paying for that lease regardless of how many butts are in seats in it. That is a fixed sunk cost they can't do anything about. There's usu
by Clubber 3y ago
>A business is stuck paying for that lease regardless of how many butts are in seats in it. That is a fixed sunk cost they can't do anything about.
There's usually a break lease clause in most contracts, no? I would imagine breaking leases is pretty common in business real estate.
- Libcat99 3y agoIn many cases, yes, and in that case it would make more sense to break the lease than to bring employees back to the office.
- tzs 3y agoFrom what I've read the majority of commercial leases do not have anything covering breaking the lease, so it defaults to whatever state law says happens when there is no prior agreement. That commonly says that (1) the landlord must try to find another tenant, and (2) the leaving tenant has to continue paying until that happens or they reach the end of the lease. Trying to find another tenant does not mean that the landlord has to take any extraordinary actions to do so. They just have to list the property as available and show it to people who show interest, just like they would with any other empty property they have. Thus, it comes down to what the market is like. E.g., when I moved from Seattle I broke a lease, but my apartment was next to the University of Washington. There are always people looking for apartments next to UW so the landlord easily found another tenant. A lot of cities right now have a glut of commercial office space available, with listings staying open for months or years. Someone breaking a lease on office space in such a city would likely finding themselves having to pay to the end of lease.