Sublease inventory continues to stabilize
- Jacob Rowden
- Elena Lanning
Sublease additions fell by more than 40% year-over-year in Q1 2024.
Growth-minded tenants continue to actively take advantage of higher-quality spaces that have been added to the market, with five subleases over 100,000 s.f. executed in the Bay Area and New York during the first quarter, led by ByteDance’s163,000-s.f. sublease of Roku’s space in Silicon Valley.
Backfill momentum continues in Q2, with the New Jersey Institute of Technology recently signing a 75,000-s.f. sublease at 494 Broad Street in Newark at the end of April.
Large-block, high-quality sublease listings have seen high demand and are beginning to become relatively scarce: after placing almost 300,000 s.f. of new space on the sublease market in Tempe since the pandemic, Carvana subleased more than 40,000 s.f. of its Marina Heights office campus to LPL Financial in April.
Strong backfill activity is allowing sublease availability to fall nationally, declining by 2.6 million s.f. in Q1 and now 16 BPS below peak sublease availability rates registered in Q3 2023.
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