When will a lessee benefit from deficit rent by sub-leasing the property?

A lessee benefits from deficit rent by sub-leasing the property when the scheduled rent is lower than the market rent. In this scenario, the lessee holds a lease agreement that stipulates a rental rate that is below the current market rate. This creates an opportunity for the lessee to sub-lease the property at a higher rate, capitalizing on the market conditions.

When the scheduled rent is lower than what the market demands, the lessee can sub-lease the property at this higher market rate and potentially generate a profit. The difference between the amount they pay (the scheduled rent) and the amount they receive (the market rent through sub-leasing) results in financial gain for the lessee. This situation is advantageous for the lessee because it allows them to leverage their existing lease for profit while remaining obligated to pay the lower scheduled rent.

In summary, the key factor in this scenario is the disparity between the scheduled rent and the market rent, which creates a favorable opportunity for the lessee when the scheduled rent is set below the current market value.