Sublease space flooding some suburban markets.

In today's suburban office market, significant supplies of sublease space are a fact of life, as they are in many urban areas. Some regions have been hit harder than others, depending on their tenant mix and proximity to major metropolitan markets. No two markets are the same, even ones inexorably linked like Westchester County, N.Y. and Fairfield County, Conn. And, while Westchester and Fairfield Counties have both recently seen a general stabilization in new sublease availabilities, as well as a burgeoning reduction in their existing sublease supply due to leasing, the pace is far slower than expected.

Despite the plethora of sublease offerings in Westchester and Fairfield and the flexibility of some sublandlords in working with potential subtenants, completing transactions that involve sublease space is often much more challenging than expected. Finding appropriate space for a client, in fact, is just the beginning -- that space still has to be crafted into something that works for that tenant. The recent Advance Publications commitment to 45,000 SF at 20 Westport Road, Wilton, Conn., for example, while appearing rather straightforward on the surface, actually required the coordination of several complex moving parts and negotiation in three different theaters of interest. As such, it is an important example of the cooperation necessary to successfully dispose of sublease space in the current commercial real estate climate.

From the very beginning, it was clear to all parties that 20 Westport Road was the ideal location for Advance Publications' Golf Digest division. Not far from the company's former 5520 Park Ave., Trumbull location, the property offered the image and amenities Golf Digest required for its new accommodations. It also had the perfect combination of contiguously available space -- 18,000 SF available for sublease for 13.5 years from John W. Henry & Company and 27,000 SF for 8.5 years from PanAmSat. In total, Golf Digest would occupy 45,000 SF in the building.

Making the deal happen, however, was rather like doing a puzzle where the pieces are cut to fit, but difficult to maneuver into place. Challenges included juggling the different, and sometimes opposing, agendas of two sublandlords and the building owner, the discrepancy in remaining sublease terms, the need for storage space, and the necessity of a non-disturbance agreement. In addition, the original John W. Henry and PanAmSat leases did not always reflect the tenant-friendly current state of the market, but that of the landlord's market of several years ago.

In the end, the final vision of a new headquarters for Golf Digest was fulfilled thanks to a willingness to compromise and recognition of the significance of the transactions by all parties. A large chunk of available space, part sublease part direct, was removed from Fairfield County's availability and 20 Westport Road gained, while Wilton and the State of Connecticut retained, a high profile, sound corporate resident. Advance Publications leased top shelf space in one of the county's most prestigious properties at a great value.

While this transaction was particularly complex due to the many different interests involved, similar situations may become more and more common as the economy begins to recover and postponed requirements are reactivated. Without flexibility, however, and the ability to gauge what is practical in today's market, the disposition of suburban sublease supplies will be unnecessarily slow.