More top companies are attempting to consolidate their office holdings and are offering their space for sublet, which is depressing landlords’ asking rents for trophy properties. Citing data from Jones Lang LaSalle, Crain’s reported that 30 percent of the space available in Class A Midtown buildings comes in the form of sublet space, well above the island’s 22 percent average. Even in The Plaza District, sublease space comprises 26 percent of all availabilities.
“There is a lot of sublease space out there,” said Cynthia Wasserberger, a managing director at Jones Lang LaSalle who worked on the report. “That’s keeping landlords honest.”
Crain’s said the proliferation of sublease space in trophy Midtown properties can be attributed to the fact that the very tenants of those spaces — typically financial institutions and investment firms — were the one’s hit hardest by the recession. However, Pfizer and Dewey & LeBoeuf have also recently added to the sublease space tally, and other business types along Sixth Avenue have contributed to a large collection of vacancies along the storied coporate thoroughfare. [Crain’s]