Oct 18, 2016
CBRE: To ride Houston office? Tenants take sublease ticket
HOUSTON - Although sublease space grew to 11.4 million sf, nearly 600,000 sf was absorbed as tenants took advantage of quality sublease space at bargain rates, according to CBRE’s Houston...
HOUSTON – Although sublease space grew to 11.4 million sf, nearly 600,000 sf was absorbed as tenants took advantage of quality sublease space at bargain rates, according to CBRE’s Houston Office MarketView 3Q 2016 report.
While leasing activity slowed throughout 2016, sublease activity was at an all-time high representing nearly half of the signed leases and 33 percent of the total sf leased in 3Q 2016.
Supply continued to increase from delivery of new construction as well as large vacancies left behind by energy companies from layoffs, bankruptcies and mergers.
As expected, vacancy continued to rise, reaching 15.6 percent and total available, which includes sublease, increased to 20.9 percent.
With nearly 5.5 percent of the market available for sublease, tenants are able to find discounted rates on prime Class A space offering six year terms on average, compared to the typical two to three-year term for available sublease space.
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