What is a sandwich lease?

A sandwich lease refers to a situation in real estate where a tenant, often referred to as the intermediary tenant, leases a property from a landlord and then subleases that same property to another tenant. This arrangement creates a "sandwich" effect, with the intermediary tenant sitting between the landlord and the final tenant.

In the correct context, choice C states that a sandwich lease involves a public agency subleasing property to a noncredit tenant. This accurately captures the essence of what a sandwich lease is, particularly in public-private partnerships where the public agency (the original tenant) leases land to a third party. This is a common approach for special projects or developments where a public agency manages the property while allowing private entities to utilize it for various purposes.

While the other options touch on different lease constructs, they do not define the unique characteristics of a sandwich lease. The first option relates to a direct landlord-tenant relationship without the intermediary. The second option focuses on leases between distinct commercial properties rather than the subleasing process. The fourth discusses maintenance responsibilities, which may be part of any lease arrangement but does not reflect the specific nature of a sandwich lease. Hence, the correct understanding of a sandwich lease lies in recognizing the intermediary role of a tenant who is subleasing