Sublease Space Rise Takes a Breather

AUSTIN-For the first time since February, the amount of sublease available in Austin office buildings has decreased and avoided passing the three million-sf mark–at least for now.

It dropped by 2,000 sf to 2.939 million sf from 2.941 million sf, according to the sublease report compiled by Mike Buls of Buls/Hodge Consulting. The available sublease space was just more than one million sf in February when Buls began tracking it.

Buls, however, isn’t reading too much, if anything, into the decrease. “I just think it’s a slowing down, temporarily,” he tells GlobeSt.com. “All it is, is just a rest spot. It’s no clear indication we’ve stabilized at all.”

He warns there’s still a lot of potential sublease space hanging over the market. Dell Computer Corp. has 182,000 sf and Solectron Corp. has 240,000 sf.

While the northwest submarket continues to have the highest vacancy rate with 61% or 1.8 million sf, Buls says the CBD, with an 8.5% sublease rate or 250,796 sf, seems to be in good shape. “The CBD, as a percentage of its market, has the least amount of sublease space,” he says. “It means the CBD is relatively healthy.”

The overall occupancy rate in the city is about 82%, according to Buls’ figures. That figure may be higher than other reports. In his report, which he compiles from information supplied by brokers, Buls includes space that’s not yet vacant, but that’s being marketed. Other surveys measure space currently available. “In the sublease report, people are putting stuff in there to get it leased, to be able to start showing it before it’s actually empty,” he says. “My numbers are bigger, but they do represent the available space on the market.”