Your situation may not be as complicated as it seems. It looks like you have Holding Company LLC that owns a building with the intent to rent it (all of it) and you have Business LLC that does something else entirely. In my experience, Business LLC should not be subletting the building, but Holding Company LLC should be leasing to 2 tenants (Business LLC and Random). Since both Holding Company LLC and Business LLC are both single-member LLCs, all three of you (you, HC LLC, and B LLC) are considered one and the same so as long as you report all of your income, you can report it with the structure that makes the most sense.
So, a single-member LLC, that owns property for rent (or lease), reports on Schedule E and a single-member LLC, that operates a business, reports on Schedule C. Holding Company LLC should report the ownership of the building (including depreciation), all rent or lease income, and all applicable expenses for owning/operating the rental property on Schedule E. Business LLC should report all income from its business sources and all expenses from its business (rent should be prorated square footage actually attributable to the business usage) operations on Schedule C.
I would then recommend amending the lease to Random to a full lease (instead of sublet) from Holding Comapny LLC and the lease to Business LLC to reflect the correct square footage and lease amount.
@streampaw
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