2.5 Mil SF Ready, Waiting on Austin's Sublease Docket

AUSTIN-The city’s sublease market has yet to stabilize, with available sublease space rising about 100,000 sf to 2.5 million sf, according to the latest Buls/Hodge report.

Another 900,000 sf of sublease flex space also became available. Mike Buls, who compiles the report, spots a silver lining: just 1,000 sf was in the northwest submarket, where about 65% of the vacant sublease space is.

Buls, an Austin broker, puts the report together with information he receives from other brokers around the city. He says 40 leases, totaling 300,000 sf, could not be evaluated because of insufficient information.

The two-week reporting period was one of the slowest with just one 23,000-sf lease reported to Buls. The period ended Sept. 15, four days after the Sept. 11 terrorist attacks that paralyzed much of the business world in the United States.

The sublease market is dominated by a dozen leases, a total of more than 1.16 million sf, with terms of 36 months or longer, according to Buls. Together, they represent 46% of the sublease market.

In a breakdown of the city’s three biggest submarkets, the northwest now has 1.6 million sf of office space available for sublease, according to Buls. There are 77 leases and the average rental rate is $21.68 per sf, with an average term of 41 months. The CBD has 283,916 sf of vacant sublease space. The space is comprised of 41 leases that average 6,925 sf, with an average rent of $22.65 per sf and average term of 36 months. In the southwest submarket, 255,475 sf of sublease space is available. The average size is 11,108 sf, with rents averaging $22.48 and the average term, 29 months.