The New York office market and many of the landmark towers are currently awash with sublease office space. In Midtown Manhattan which is populated by some of the world’s biggest and most important financial institutions, there is sublease space available in 75% of the towers themselves. And those landlords who have space available are not always finding it easy to get the space filled, such is the large volume of vacancies. In midtown, the vacancy rate for class A space – that is highly desirable offices in prestigious locations, was 13%. This is up from just over six and a half percent a year ago.
In fact sublet space now accounts for 40 percent of all available space in midtown. Compare this with the figure of 30% a year ago – with the total amount of available space much lower. In many cases the lease for the original deal was barely completed when the companies within the buildings needed to sublease space as they contracted. In some cases companies are having to spend money on their vacant space to make it more attractive to potential tenants or offer a generous work allowance so that new tenants can make improvements. In some cases, a reorganisation of furniture or a lick of paint is all that maybe needed. Making smaller blocks of space is also likely to increase the chances of securing a sublet. It may even mean moving current employees to less desirable areas of the building!