Available office sublease space nationwide has hit a new high in the second quarter of 2021, up from the first quarter of the year and vastly increased from the beginning of the coronavirus pandemic, according to new data from JLL.
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"The current sublease figure is 158.1M SF, up 4.5% from 151.2M SF in Q1," JLL U.S. Office Research Director Phil Ryan told Bisnow by email Thursday morning. "Over the course of the pandemic, sublease availability is up 64.5M (up 69%)."
The growth in listed U.S. sublease space was especially vigorous in 2020. During the third quarter, listings were up 22% quarter-over-quarter.
The pattern in sublease availability mirrors that of office occupancy losses as a whole: much more last year than this year so far. Occupancy losses totaled 37.9M SF in Q1 this year, down from a record 40.5M SF in the fourth quarter of 2020, JLL reports.
Combined with an additional 12.8M SF of office space completions during the first quarter, vacancy rose by 110 basis points to a record 18.2% at the end of Q1 2021. JLL predicts that U.S. office vacancy will remain elevated through 2021 and into 2022, despite any post-pandemic recovery that the economy makes.
That is because many of the economic gains may occur in non-office-using sectors, the company notes. Continuing remote work programs and distributed labor pools will probably have a lasting impact on the office market as well, but the true extent of the impact might not be known for years.
Cushman & Wakefield reported in May that the total amount of sublease space in the U.S. and Canada has now surpassed the peak level of the Great Recession.
Sublease space now accounts for 2.4% of total North American office inventory, up from 1.2% at the end of 2019 and higher than during the Great Financial Crisis. At the peak of the dot-com recession in the early 2000s, sublease listings in North America totaled 2.9% of inventory.
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