The Ups and Downs of Sublease Space
Robert Sammons June 12, 2013, 7 a.m.
Total sublease space currently on the market in Manhattan (May 2013) stands at 10.8 million square feet, its lowest figure since January of this year and below its 10-year average of 11.2 million square feet. It has ping-ponged around for a couple of years now, staying within a range of about one million square feet.
Want some more fun facts about available sublease space? Why, I am glad you asked!
- The current amount of sublease availability is well below its recent high of 17.4 million square feet, recorded in July 2009 (just one month after the official end of the last recession), and is about half the nearly 20 million square feet that was on the market in late 2002/early 2003.
- On the flip side, if we went way back to the year 2000, we would find sublease availability at a very low 1.8 million square feet.
- Of the amount of sublease space currently on the market in Manhattan, 7.9 million square feet (73 percent) is within the Class A segment, with 5.9 million square feet of that (75 percent) in just the Class A buildings of Midtown Manhattan.
- Across all classes in Manhattan, the average asking rent for direct space is currently $56.01 per square foot, versus $45.17 per square foot for sublease space. For the Midtown Class A segment, direct availability is priced at $68.79 per square foot, versus sublease availability priced at $55.45 per square foot.
- Though big blocks get most of the attention, the majority of space for sublease—a whopping 84 percent, in fact—is under 20,000 square feet. Further, 66 percent of the subleases on the market are under 10,000 square feet.
- And finally, a word about those big sublease blocks: there are now 11 that are 100,000 square feet or greater (contiguous) on the market across Manhattan. Seven of these are in Midtown Manhattan (all Class A) with two separate contiguous blocks in one building—299 Park Avenue. There are four blocks in Midtown South (three Class A and one Class B). The largest single contiguous sublease block now on the market, at just over 288,000 square feet, is located at 1290 Avenue of the Americas, although that isn’t going to last much longer, as most of that space is said to be spoken for (in fact, by the time this column runs, it could—poof—all be gone). Meanwhile, terms remaining on these big subleases run the gamut, from just about a year (at 666 Fifth Avenue) to as much as almost 11 years (395 Hudson Street).