What creates a sandwich lease in real estate?

A sandwich lease occurs when a lessee, also known as a tenant, sublets the property to another party while still holding onto the original lease with the lessor, or landlord. This arrangement effectively creates an additional layer of leasing within the context of the original lease. In this scenario, the original lessee becomes a lessor to the sublessee, resulting in a "sandwich" situation where the original lease sits between the lessee and the sublessee.

For example, if a tenant leases a space and then rents it out to another party, the original tenant retains the obligations of the lease with the landlord while also creating a new lease agreement with the subtenant. This layered structure can benefit all parties involved, as the original tenant may earn income from the sublease while still complying with the terms set forth in the main lease.

The other options do not accurately describe a sandwich lease. Signing a lease on different dates does not inherently create a sandwich lease; it merely indicates the timing of agreements. Renting property specifically to a restaurant does not change the fundamental leasing structure or create a sandwich scenario. A month-to-month lease is simply a type of agreement related to the duration of the lease rather than the layering of lessees and less