- June 1, 2016: Vol. 28, Number 6

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Risks arise from tech markets’ increase in sublease space

by Loretta Clodfelter

Sublease space in tech-oriented real estate markets is increasing, and oversupply of sublease space has preceded market downturns in the past, noted CBRE’s Colin Yasukochi, director, research and analysis, and Lexi Russell, senior research analyst, in a recent ViewPoint report on the North American office market. “In the past, sublease space oversupply has preceded a market downturn, and the rising inventory among tech markets needs to be closely monitored,” the report cautioned.

According to CBRE, sublease inventory in the top 30 tech-oriented markets in the United States and Canada has reached 57.2 million square feet — a 1.7 percent availability rate. Tech firms — which account for 10.1 million square feet of sublease space, or 17.6 percent of current available sublease space — can be especially volatile occupiers. As Yasukochi and Russell note: “It is too early to characterize this increase in available space as a troubling trend; however, tech firm

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