NYC office sublease inventory drops sharply

New York City’s office subleasing marketing is drying up, and landlords are readying for rent hikes in its wake, Crain’s reported. Data from Cassidy Turley shows that in November, the amount of available New York sublease space — usually 30 to 40 percent cheaper than space available for direct leasing — hit 10.9 million square feet. That’s the city’s lowest level since October 2008, when the market crashed and subleases began flooding the market as tenants with pricey Park Avenue office space snapped into consolidation mode. By May 2009, 17.3 million square feet of sublease space was available in New York City and had pressured landlords city-wide to drop their asking rents. Today, many of those subleasing bargains have been snatched up, and some landlords have already taken note. “Landlords are going to be more aggressive on raising rents now that they aren’t competing with as much sublease space,” said Robert Sammons, vice president of research at Cassidy Turley. [Crain’s]