More U.S. office subspace became available again during the first quarter of 2022, according to a recent CBRE report. The sector saw a 5.4% drop nationally during the second half of 2021, as some occupiers took advantage of the economical pricing. Availability jumped 3.6% during Q1 2022, however, despite price-conscious tenants continuing to sublease space at a relatively rapid pace.
Meanwhile, subspace leasing increased 60% year-over-year during Q1 2022, which is the most amount of activity during a first quarter in the past six years. First quarters historically have had the least amount of subleasing activity, according to CBRE. This year’s early surge could be a sign that there could be larger quarterly increases later in 2022.
The office subspace leasing activity over the prior six quarters has resulted in 159 million square feet increase during the first quarter. It’s a slight drop off from the high mark of 162 million square feet, during the third quarter of 2021.
“While sublease availability remains above pre-pandemic levels in every major market, some of them are seeing modest improvements,” CBRE said in its intelligence briefing.
In terms of geography, Boston, Denver and Seattle recorded the biggest Q1 2022 percentage reductions of the 20 largest markets in their available sublease supply from Q3 2021, which was the pandemic-era peak for total U.S. sublease space. Meanwhile, Minneapolis, Philadelphia and San Jose saw the biggest increases, and Manhattan, San Francisco and Washington, D.C. had the most total available sublease space.
