Snapshots
July sublease additions fell to the lowest level in 10 months
August 01, 2023
Contributors:
- Jacob Rowden
- Elena Lanning
- In the clearest indication to date that office sublease additions have peaked and are beginning to normalize, new sublease availabilities added to the market in July totaled just 2.8 million s.f. nationally, the lowest total since September 2022 and slightly below the monthly average since April 2020.
- The return to healthier sublease levels will be one precursor to the broader office market recovery: sublease availabilities have weighed on rent growth in the past year and contributed more than 60% of negative net absorption that has occurred since Q4 2021.
- Large additions continue to be added to the market even in the past month: July had five new sublease availabilities above 100,000 s.f. added to the market, but this was down significantly from an average of 11 large sublease listings added per month year-to-date.
- In a sign that additions from large technology companies are beginning to decline, Google reported in Q2 that costs to exit leases had declined roughly 90% from Q1 levels as the company begins to stabilize its office footprint.
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