Sublease Space Continues to Rise
As companies gear up to go back to the office, many are downsizing or vacating all or part of their office space as they begin implementing a work-from-home or a hybrid approach to office space utilization. Companies face the challenge of balancing workplace safety, flexibility, productivity and culture. The bottom line is more companies are shedding excess space as they get more and more comfortable with their employees working from home either full time or part time. This past quarter alone, St. Louis saw an increase of roughly 342,000 square feet (SF) of sublease space. The largest growth was in Downtown St. Louis, with an additional 287,000 SF of sublease space hitting the market. The NSI Building (2300 Locust Street) has 135,000 SF of sublease space that became available in May of 2021 with Ansira attempting to sublet around half of their space. This was the largest increase in a single building in Q2, expanding an already large supply of space available within Downtown St. Louis.
The Suburban submarkets have also seen a spike in the sublease space since the beginning of the pandemic. There is currently 710,000 SF available for sublease in these submarkets, compared to 250,000 SF one year ago. Of the suburban submarkets, Clayton saw the largest of this increase with an additional 69,000 SF of sublease space becoming available in Q2 2021. The Olive/I-270 and Manchester/I-270 submarkets each saw a decrease of approximately 15,000 SF in available sublease space.
Since Q2 of 2020, the amount of sublease space available has increased 102% and is showing few signs of decreasing. St. Louis is not alone in this rise of sublease space. Other major metro areas across the country are seeing an increase in available sublease space as users contemplate the work-from-home model or hybrid approach to occupying space.