Home Depot to sublease 300K sf in Austin

Another household brand is subleasing its space in Austin.

Home Depot is vacating Parmer 3.1, a 300,000-square-foot building at 13011 McCallen Pass in the Parmer Austin Business Park, the Austin Business Journal reported. Aquila Commercial is marketing the property, which is about 12 miles north of downtown and owned by New Hampshire-based Net Lease Capital Advisors. 

Home Depot’s lease runs through 2032, which isn’t ideal for landing a new tenant, according to Steve Triolet, a researcher and market forecasting expert with Partners real estate. Three to five years is better suited for sublease, Triolet told the outlet.

The home improvement company, led by CEO Ted Decker, leases the entire building, but its three stories can be divided into 30,000-square-foot spaces for businesses looking for something smaller. Sublease listings are on the market for about a year on average before being filled, Triolet said.

Remote-work trends fueled by the pandemic significantly lowered Home Depot’s demand for office space. 

“Our technology associates are working remotely, so we no longer needed that space,” a Home Depot representative told the outlet. “We made the decision at the end of 2022 to sublease the building and are still operating at our other location in Austin.”

Home Depot posted its first earnings drop in three years this week as consumers have pulled back from pandemic-related demand.

Austin’s sublease availability recently exceeded 5 million square feet amid remote-work trends and hiked interest rates. Subleasings have permeated the city, including downtown office towers and smaller properties on the outskirts of Austin.

Within the same office complex, 3M put 204,000 square feet up for sublease at Parmer 3.3.

Workrise Technologies recently put its 47,000-square-foot space at the One Eleven Congress building on the market. About a week later, TikTok subleased 126,000 square feet, spanning six floors, in the 32-story 300 Colorado tower. 

One of the city’s most notable sublease listings came from Meta. The Facebook parent company backed out of its plan to occupy 589,000 square feet at Sixth and Guadalupe, leaving the landlord, Lincoln Property, a massive void to fill.

—Quinn Donoghue