Which clause in a lease allows a tenant to lease space to a third party?

The clause that allows a tenant to lease space to a third party is the Sub Lease clause. This type of clause provides the tenant with the legal ability to enter into a new agreement with a third party, letting them occupy the leased premises or a portion of it, often while maintaining their own obligations to the original landlord under the primary lease.

Including a Sub Lease clause in a lease agreement is important for tenants who may need flexibility in space usage, such as businesses that can benefit from sharing resources or those that encounter changes in their operational needs. This arrangement helps in managing financial responsibilities, especially in fluctuating markets where space requirements might vary.

In contrast, the Work Letter refers to provisions around construction and improvements to the leased space, the Escalation Clause deals with changes in rent or additional expenses based on operating costs or inflation, and a Gross Lease involves a rental structure where the landlord covers all property expenses. None of these options provide the authority for leasing to a third party, which is why the Sub Lease clause is specifically relevant in this scenario.