Office Sublets...They're Everywhere
Sublet office space is on the rise nationwide, according to a spot check of recent newspaper articles, conducted by the Insider. Within one week, we found several newspaper articles focusing on the “flood” of sublet commercial space in major cities, including New York, Dallas, and San Francisco. One of the major problems, however, is finding potential subtenants to move in, especially in older spaces requiring renovations.
What are tenants doing to make their spaces more attractive to potential subtenants? According to one real estate expert, they’re investing in improvements or giving subtenants a work allowance to redo the space themselves, says The New York Times.
Sometimes the fixes are small—ranging from rearranging furniture to a simple paint job. Others are taking more drastic steps, such as reconfiguring space, moving their own employees into less desirable space, or building conference room areas.
In some markets, the tenants are even “competing with their landlords” by offering lower rents. In Dallas, one tenant cut the rent for his subtenant by 40 percent, and another offered his subtenant five months’ free rent.