Lease Takeover: NYC Office Leasing, Explained

Q: How is a takeover different from a normal sublease?

A sublease keeps the original tenant on the hook between you and the landlord; an assignment hands you the lease itself. Assignments give cleaner long-term control; subleases are faster and easier to unwind.

Q: Who pays the broker on a takeover?

Almost always the outgoing tenant or landlord side, tenant representation typically costs the incoming tenant nothing, which is one more reason not to negotiate one alone.

A lease takeover means assuming another tenant’s existing lease, either by assignment, where the lease itself transfers to you, or by sublease, where you occupy for the remaining term while the original tenant stays on the paper. Takeovers surface when a company downsizes or relocates before expiry, and they are the fastest discount in New York offices: the space is usually built, often furnished, and the outgoing tenant is motivated. The trades are real. The term is fixed to whatever remains, the buildout reflects someone else’s taste, and landlord consent adds a step. In a soft market, takeovers are where the deals hide.

Updated 2026-09-30 · NYC leasing glossary · Nomad Group

Worth knowing

Takeover structures vary document by document; nothing here substitutes for reading the prime lease and the consent papers on the specific transaction.

How a takeover works inside a New York lease

Nearly every New York office lease restricts transfer, so a takeover starts with the assignment and subletting clause of the lease being assumed. The outgoing tenant applies for consent, the landlord reviews your financials as it would on a direct deal, and nothing signs until that clears.

Structure decides what you own. On an assignment the lease transfers to you, you pay the landlord directly, and the remaining term, escalations, and options become yours. On a sublease your contract is with the outgoing tenant and your rights sit underneath the prime lease. Whether options travel varies by document; confirm on the specific lease.

A worked example against the citywide median

The citywide median asking rent on our book is $75 per square foot per year. A direct deal at that number typically arrives with a construction period and a longer commitment. A takeover of a comparable floor usually prices below it, because the space is already built, often furnished, and the outgoing tenant pays rent every month the floor sits empty.

The right comparison is effective cost, not face rent. Weigh the discount to the $72 median against the value of walking into a finished, furnished floor on day one, then subtract what the shorter term costs you in flexibility. When the install fits your headcount, the takeover usually wins; when it does not, no discount fixes it.

What is negotiable, and what a tenant broker pushes on

More moves in a takeover than most tenants assume. We press hardest on:

Rent against the prime lease: sub-rent can sit below what the outgoing tenant pays, and that gap is their loss to absorb, not your ceiling.
Delivery condition and furniture, documented with an inventory, so the floor you toured is the floor you get.
Free rent to cover the move and the consent period.
Security, both the deposit size and a burn-down as you perform.
A path past expiry: talk to the landlord about what follows the assumed term before you sign, not after.

The traps that cost tenants money

The expensive mistakes cluster in the paper you inherit. An assignment can carry the original tenant’s obligations with it, arrears and existing defaults included. Escalations and expense base years travel with the lease, and an old base year can mean pass-throughs that erode the headline discount, while restoration clauses can leave you removing an install you never built.

On subleases the structural risk is the prime lease itself, since a termination above you generally ends your tenancy, and unmanaged consent timelines can threaten a move date. All of it is findable before signing and expensive after, so we read the prime lease and consent papers before our clients commit.

How is a takeover different from a normal sublease?

A sublease leaves the original tenant in the middle: you pay them, they pay the landlord, and their lease governs everything above you. An assignment hands you the lease itself and cleaner long-term control; subleases are faster to paper and easier to unwind.

Who pays the broker on a takeover?

Almost always the outgoing tenant or the landlord side, so tenant representation typically costs the incoming tenant nothing, one more reason not to negotiate a takeover alone.

Who negotiates this for the tenant?

On a tenant-only mandate this is argued for you. Nomad represents tenants exclusively, never landlords, across 300+ delivered New York offices, and the outgoing tenant’s broker is paid to move their problem, not to solve yours.

Can the landlord block a takeover?

Most New York office leases require landlord consent to any assignment or sublease, usually under a standard that consent will not be unreasonably withheld, and some reserve a recapture right that lets the landlord take the space back instead of approving your deal. Confirm both on the specific lease early.

What happens if the original tenant stops paying on a sublease?

Your sublease sits underneath the prime lease, so if that lease is terminated for the original tenant’s default, yours generally falls with it even though you paid on time. We push for notice and cure rights or a recognition agreement where the deal justifies it, and we underwrite the outgoing tenant’s credit first.

Is a takeover always cheaper than a direct lease?

Usually, not always. Against the $72 per square foot per year citywide median asking rent on our book, a built and furnished takeover tends to price at a discount, but inherited escalations, an old expense base year, and restoration obligations can claw it back, so we compare on effective cost over the term.