Sublease availability increased in 2021, but what that means for the new year is uncertain.
In the Columbus market, there are 109 available spaces for sublease, representing about 1.5 million square feet, according to a Colliers report from October, the most recent data available.
That compares to less than 600,000 square feet of sublease space available in 2019, according to Colliers, which also found that 81% of the subleases available now have come on the market since the pandemic started.
Many companies have listed space for sublease, whether they've pivoted to working from home or are looking to move or downsize. For example, American Electric Power Co. is subletting all the non-owned space in its portfolio, said Wayne Harer, executive managing director at Newmark Knight Frank in Columbus.
Harer said this is a difficult market to sublet because there is so much space available, and he predicted there will likely be more spaces listed in 2022.
"A lot depends on what goes on with the (Covid-19) virus," he said.
Harer said to attract and retain new employees, companies need to be flexible. "There's not one right answer," he said. "No one has a crystal ball."
Matt Gregory, senior vice president with NAI Ohio Equities, said larger blocks of sublease space tend to stay available longer. Smaller, more creative spaces are snatched up quickly, he said.
The majority of sublease space available – 82% of it – is less than 20,000 square feet. And 39% of space available is less than 5,000 square feet.
Too much available sublease space could drive overall rents down. Sublease asking rents are 11% lower than direct market rents, Colliers data shows. Harer said some sublease rents are 50% to 75% less than the original rent.
"I think a lot of tenants think half is better than zero," Harer said.
By the numbers
- 24% of subleases are in the city's central business district.
- 31% of subleases are in Dublin, Easton and Worthington.
- 41% of available sublease is class A space; 47% is class B.
Large sublease deals
- Upstart leased 240,000 square feet of Alliance Data's space in Easton for seven years. Alliance Data still has sublease space available in Westerville and on East Broad Street.
- State Farm listed 148,000 square feet of space on New Albany Road.
- Big Lots listed 75,000 square feet for sublease in New Albany.
- Ascena Retail listed 135,000 square feet at their 3344 Morse Crossing office for sublease.