Office space is hitting the market as landlords grapple with low demand, lease expirations
Sublease availability is near historic highs in New York.
The following appear in the May 11, 2022, Wall Street Journal print edition as ‘Office Owners Look to Unload Sublease Space.’
By Konrad Putzier (Updated May 9, 2022)
Companies throughout the U.S. are flooding the market with office space they want to sublease, aggravating landlords already facing weak demand as more tenants embrace hybrid work.
The amount of space listed for sublease surged in the first year of the pandemic to the highest level in decades in some cities. But it fell in the second half of 2021 as offices leased up and some companies took listings off the market.
Now it is rising again. Sublease availability across the U.S. increased 3.6% in the first quarter to 159 million square feet, according to CBRE Group Inc. That is still below last year’s peak of 162 million square feet, but well above prepandemic levels.
All that space is hitting the market at a time when landlords are already grappling with low demand and a record amount of lease expirations, pushing rents down and vacancies up.