- Jan. 22, 2021
-- The office market has been incredibly slow. Subleases have flooded the market resulting in an increase of approximately 2.1M SF since the start of the pandemic (from 1.0M SF to approximately 3.1M SF). This is a 210% increase over 9 months. Many of these subleases are the result of medium and large-sized tech users gobbling up space to accommodate speculative growth when the market was hot, only to realize that in-office head count growth in 2021 or 2022 is unlikely. Other subleases are driven by changing energy markets (Parsley Energy alone placed 448K SF of sublease space on the market in the CBD). Lastly, many companies are placing their space on the market just to test the waters. If a company's lease is rolling in 2022 and they aren't confident the space will be utilized in 2021, why not give it a try? Finding a sublessee would allow them to cut cost until their expiration, at which time their needs (size, budget, configuration, etc.) will likely be different than today. Furthermore, if the company's need for a physical presence changed beforehand, there are ample opportunities to re-enter the market under favorable terms. Regardless of the reasoning (though all point back to COVID-19), sublease opportunities are abundant city-wide and many sublessors are willing to get extremely aggressive to beat the competition.
Read more at: https://www.colliers.com/austin