Rep Behind Superb Subleases Breaks Down Market

While landlords may be bemoaning the sublease trend (although some, like Brad Freels, aren't so worried), it's opening up opportunities for tenants. We chatted about the trend with Cushman & Wakefield's Joe Rambin, who has completed a dozen sublease deals in the past year, including that crazily discounted ChaiOne lease.

Joe helped ChaiOne get 66% off the direct rental rate and several months of free rent, creating headlines across the city. But Joe says it's just another sign of how hot the Houston sublease market is. Trends are enticing renters into the market, with deals often including heavy discounts on rents, furniture at little to no expense and several months of free rent. It’s not just the Energy Corridor that’s heating up; Houston’s CBD is seeing a sharp rise in subleases with Shell and BG offering up space, and in the Galleria area, BHP’s got a big chunk on the sublease market.

With commodity prices low across the board, the trend isn’t limited to Houston. Many tenants signed long leases from 2011 to 2014, taking as much space as they could, but are now struggling to fill it. With so much sublease space available, nearly all of Joe’s clients are interested in looking at subleases.

Though the market is doing all it can fill the space, Joe cautions his clients to manage their expectations. The market is soft but it’s still a market. Companies looking for a sublease to weather out the downturn need to prepare to find a new space after, or expect dramatic rate hikes. The key to success in a sublease deal, as always, is knowing the space.

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