Fintech company Foxen recently moved from 80 on the Commons in the downtown core to Columbus' Arena District, one of the first big subleases of 2023.
The deal represents a trend to watch in the local real estate scene that is also the topic of this week's Punch List.
Michelle Fude, a first vice president with Colliers who worked on the Foxen deal, said it is a good sign for the Columbus office market heading into the new year.
As companies are shifting working models following the Covid-pandemic, an increased pool of space is now available for sublease. In fact, the recent spike in sublease space on the market was the largest such increase since the Great Recession.
That's the subject of our most recent cover story. In that story, Collin Wheeler, a first vice president with CBRE, said although the total amount of sublease space is high, that’s not the whole story. Most of the available space is at a small number of large offices.
“While there are a lot of sublease spaces – obviously companies have been consolidating or giving back office space – there are a couple outliers that are just really large in size that definitely bring up the total amount of square footage on the market,” Wheeler told Columbus Business First.
Spaces of note include the 406,000-square-foot building at 5100 Rings Road in Dublin that Cardinal Health put up for sublease because more of its employees are working from home; the 235,000 square feet Upstart itself subleased from Bread Financial in 2021 at 3075 Loyalty Circle but may no longer need following a workplace strategy change; and nearly 150,000 square feet up for sublease at the former State Farm Operations Center in New Albany.
The Foxen sublease shows that there is demand for the right-sized space. There is an appetite for office space and there are companies expanding even in uncertain economic times.
Foxen made its move to set itself up for continued growth. It moved from a 6,000-square-foot space into a 30,000-square-foot one. The firm declined to disclose the leaseholder, but the building was most recently home to Nations Lending. That firm its Columbus address as 80 E. Rich St., which is 80 on the Commons.
The new space should give the 75-employee firm room to grow to 120 by the end of the year, executives said. The building has 150 work stations, six conference rooms, six private call rooms, stadium seating for all staff meetings and both a kitchen and kitchenette.
It's also good for company culture and quality of life, Managing Director George Sacco said, with more activities and restaurants within walking distance of the office.
In interviews for our cover story on the surge in sublease space, Wheeler said that the "flight to quality" and "flight to experience" trends continue. Spaces that were difficult to lease or sublease pre-pandemic continue to see headwinds. Spaces that are in highly amenitized, high demand areas continue to do well.
Many tenants are seeking out mixed-use developments in the Short North, Bridge Park in Dublin and at Easton, as well as existing buildings in places such as New Albany and Polaris, where there are restaurants, entertainment and other amenities nearby.
“Most employers are trying to justify the commute,” Wheeler said. “If it takes 20 minutes to get in, rather than sitting on an island somewhere where there’s no lunch options, people like having something that just has some vibrancy and some community about it. I think the experiential piece is not walking into a sea of cubicles,” he said.