Stuck in commercial lease with 2 years left - went fully remote, can I break it?

I'm in a tough spot. Signed a 5-year commercial lease for office space in Denver back in 2023 (3200 sq ft, $6800/month). At the time we had 8 employees and were growing.

Fast forward to now - we're down to 5 employees, all working remotely, and we haven't used the office in over 6 months. Paying $81K/year for empty space is killing us. We still have 2 years left on the lease.

I talked to the landlord about early termination and he basically said "not my problem, you signed a contract." The lease has no early termination clause. What are my actual options here? Can I just stop paying and walk away? Find a sublease tenant? I'm desperate.

Whatever you do, DON'T just stop paying and walk away. That's breach of contract and the landlord can sue you for all remaining rent plus damages, attorney fees, etc. Plus it destroys your business credit.

Your realistic options:

• Sublease: Find another tenant to take over the space. Check if your lease allows subleasing (most do with landlord approval).
• Assignment: Transfer the entire lease to a new tenant who takes over all obligations.
• Negotiate buyout: Offer the landlord a lump sum to terminate early (usually 3-6 months rent).
• Help find replacement tenant: If you can deliver a qualified tenant to the landlord, they might let you out with minimal penalty.

The market for office space is terrible right now post-COVID, so landlords are more flexible than they used to be.

@CommercialRealEstateGuy I checked the lease - it says subleasing requires "prior written consent of landlord, not to be unreasonably withheld." Does that mean he HAS to approve a sublease as long as the tenant is qualified?

Also, if I do find a subtenant, am I still on the hook if they don't pay rent?

Real estate attorney here. That "not to be unreasonably withheld" language helps you. It means the landlord can't arbitrarily reject a qualified subtenant.

What makes rejection "reasonable" vs "unreasonable":

• Reasonable: Subtenant has poor credit, insufficient financials, incompatible business use, or bad references
• Unreasonable: Landlord just doesn't like them, wants to wait for direct tenant at higher rent, or gives no legitimate business reason

To answer your second question: Yes, in a sublease you remain liable as "master tenant." If subtenant stops paying, you still owe the landlord. That's different from assignment where the new tenant takes over the lease entirely (though even then, landlords often require you to remain as guarantor).

Strategy I'd recommend:

1. Actively market the space (LoopNet, Crexi, commercial brokers)

2. When you find interested prospects, present them to landlord with full financials/credit info

3. If landlord rejects without valid reason, you have grounds to argue he's breaching the "reasonable consent" provision

4. Simultaneously approach landlord about negotiated buyout. Offering 4-6 months rent to walk away might be attractive given the weak office market.

I was in your exact situation in 2024. 3 years left on a lease, went remote, landlord was being difficult. Here's what worked for me:

I hired a commercial broker to help sublease the space. Cost me one month's rent in broker fee, but they found a tenant in 6 weeks. The key was pricing it aggressively - I offered it at 15% below market to make it move fast.

Yeah, I'm still technically on the lease as guarantor, but the subtenant has been paying reliably for 14 months now. Way better than paying for empty space.

Also - check if there's any maintenance or repair issues with the space. If the landlord is in breach of any obligations (HVAC not working, roof leaks, etc.) that can give you leverage to negotiate an exit.

This is all super helpful. I'm going to try the buyout negotiation first. If I offered 6 months rent ($40,800) to terminate, is that a realistic number? Or should I start lower and negotiate up?

Also @RealEstateLawyer_Tom - if I can't reach a deal with the landlord, can I just start listing the space for sublease without his permission? Or do I need his approval before I can even market it?

$40K for a $163K remaining obligation (24 months x $6,800) is about 25% - that's on the low end but not insulting given current market conditions. I'd actually start at 3-4 months ($20-27K) and negotiate to 5-6 months. Landlords know office space is hard to lease right now.

Re: marketing before approval - you can absolutely market the space and find prospects before getting landlord consent. You just can't finalize a sublease without his written approval. Think of it as presenting him with a done deal: "I found a qualified tenant, here's their financials, approve or tell me a legitimate reason you're rejecting."

Important: Put everything in writing. Email the landlord formally requesting consent to sublease, offering to help find replacement tenants, and proposing the buyout. Creates a paper trail if you need to prove you tried to mitigate damages.

Property manager perspective: Your landlord is probably worried about having vacancy. If you can make his life easier by delivering a ready-to-go tenant, you have way more negotiating power.

Things that make landlords more flexible on buyouts:

• You maintain the space well and leave it in good condition
• You give plenty of notice (3+ months)
• You help market it or bring prospects
• You're willing to be flexible on move-out timing to align with new tenant move-in

Things that make them dig in their heels:

• Being combative or threatening breach
• Letting the space deteriorate
• Demanding immediate exit with no transition period

Approach it as a business problem you're solving together, not an adversarial negotiation.

Quick update: Sent the landlord an email proposing a $27K buyout (4 months rent) to terminate in 90 days. Also offered to maintain the space and help with showing it to new tenants.

He responded pretty quickly - rejected the buyout but said he's open to me finding a sublease tenant OR he'd consider a higher buyout number. Asked me to submit a formal proposal with financials showing my company's situation.

Progress at least. Going to simultaneously list the space and counter with a $35K buyout offer.

That's actually a good response from the landlord. He's engaging, not stonewalling. The fact that he's asking for financials means he's considering the buyout seriously - probably wants to see if you're in genuine distress vs just trying to get out of a deal.

When you list the space, price it competitively. Check what similar spaces in your area are going for and undercut by 10-15%. Faster you can move it, less you pay overall.

One more angle to consider: If you find a subtenant willing to pay MORE than your current rent, you can potentially offer some of that upside to the landlord as incentive to approve the sublease. Like if someone would pay $7,500/month for the space, offer the landlord the extra $700/month in exchange for releasing you from the master lease.

Final update: We reached a deal! Found a subtenant through a commercial broker (tech company looking for short-term space). They're willing to take it for 18 months at $6,500/month.

Landlord agreed to let me assign the remaining 24 months to them, with me paying a $13,600 "assignment fee" (2 months rent) and guaranteeing the first 6 months of their rent. After 6 months I'm completely released.

Not perfect but way better than paying $163K over 2 years. Total cost to me is about $52K (6 months guarantee + assignment fee + broker fee) vs the full amount. I'll take it.

Thanks for all the advice, especially @RealEstateLawyer_Tom and @CommercialRealEstateGuy. The key was approaching it collaboratively and having multiple options (buyout vs sublease) to negotiate from.