Written by: Gracie Criger
Gracie is a student at The University of Cincinnati studying Real Estate. She is currently interning with Colliers | Columbus on the research team. Keep reading for an overview on sublease activity in the Columbus market.
As the rate of sublease availability is increasing, the use of office space is attempting to stay steady. Looking at available sublease space from a Columbus standpoint, submarkets such as Dublin, Easton and New Albany have more available space than other submarkets. As available office space was added to the market because of COVID-19, it is no surprise that sublease space increased by 100 percent since the start of the pandemic. In the current Columbus market, there are over 70 spaces available totaling over 2.2 million square feet, with 56.34 percent of it being class A. 84.56 percent of available sublease space that is currently available in Columbus is greater than 20,000 SF. The numbers are still alluding to companies giving their team members the ability to work from home, which has become quite the incentive for employees. Recent articles show that this trend may start to decline.
CEO’s from larger companies, like Amazon and Farmers Insurance, have spoken up about returning to the office in a mandatory form, saying employees need to return three days per week at minimum. This is causing large numbers of people to leave companies. As companies continue to implement this, there will be a domino effect between office space usage and employees. This trend cannot last forever, and competitive office space will have to return. According to the latest Colliers U.S. Office Market Outlook, sublease space hit a new record high. “The amount of sublease space currently on the market is at an all-time high of 254 million square feet” across all U.S. markets. Nationally, sublease availability increased by 11.2 million square feet in the first quarter of 2023.
Considering the unknown future of office space, sublease availability could go in many different directions. Looking at other markets in the U.S., San Francisco currently has the highest sublease availability at 9.2 percent. Rental rates within sublease properties are lower, where the national discount is 29 percent for class A buildings, with Washington D.C. leading with 53.1 percent discount. As we see sublease availability change in Columbus, the numbers can attest to the status of companies and employees within.