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North America Office Space for Sublease | Q3 2021

Sandy Romero • 11/17/2021

Sublease Office Sector Inventory Declined for First Time Since Pandemic Began 

The North American sublease market may have finally peaked after several quarters of increasing inventory. This timing would match a similar path to previous recessions when sublease space increased for approximately two years before hitting its highest point and then receding. 

In Q3 2021, sublease office space declined in more than 50% of North American markets, including 20 markets where sublease inventory dropped quarter-over-quarter (QoQ) by 100,000+ SF. Space declines were significantly stronger among the six U.S. gateway markets, which collectively saw inventory drop by 5.1%.  

Businesses are Snapping Up Sublease Space at Reduced Rates 

There have been some instances of businesses removing large chunks of their own sublease space from the market as they develop clearer workplace strategies for a post-COVID-19 return to office workforce. However, most of the decline in sublease space in Q3 was due to space being subleased to other companies. 

Signing sublease space is attractive for many businesses given the current price discounts available. Across major markets, sublease space discounts off direct rents range anywhere from 10% to 50%. (Note: This does not account for increased direct lease concessions currently available.) 

Additionally, given the uncertainty related to how more agile workforces may look in a few years, the shorter lease terms often required with a sublease are currently considered a benefit when historically shorter terms may have been seen as a downside. 

CBD’s Share of Sublease Space 

The pandemic more deeply impacted many Central Business Districts (CBDs), which led to less office usage and disproportionate increases in sublease over the past year-and-a-half. For example, 46% of North American sublease space added in 2020 was in CBD submarkets, even though CBDs account for only a third of total office space inventory. 

The decline in sublease space, however, is being led by CBD submarkets. In Q3 2021, 83% of the decline in sublease inventory occurred in CBDs

Download to learn more. 

20 North American Markets where vacant office sublease inventory declined by over 100,000 sf in q3 2021:


MARKET  DECLINE (sf)    MARKET DECLINE (sf)
Manhattan 1,322,310       San Mateo Co. 238,975
San Francisco 1,004,045   Raleigh/Durham 208,263
Oakland 536,118   Jacksonville 198,842
Austin 450,202   Las Vegas 181,539
Charleston 430,754   Northern VA 158,519
Boston 386,056   Denver 146,148
Toronto 362,858   San Diego 143,564
Atlanta 353,174   Washington, DC 138,446
Seattle 275,498   Orange County 119,036
Richmond 263,484   Houston 115,859

U.S. Gateway   United States   Canada

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