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The business dynamics created by the recession is a painful reminder to tenants of the need to strive for as much flexibility as possible in their leases. As a result, exit strategies cannot be neglected when entering into leases. Those companies that have built “flexibility” into their leases can now downsize or reconfigure in order to respond to changing needs. Let’s look at some of the strategies employed by tenants and analyze how they affect tenant and building owner alike.

Perhaps the oldest exit strategies are found in assignment and subletting clauses, which allow tenants to reduce or eliminate costs. They may even create a profit if the fair rental exceeds the tenant’s rent obligation and the tenant is entitled to all or a portion of that excess.

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