Most of that sublease space, Coddington says, is in small pockets of less than 10,000 sf in far northwest Austin. The total amount of office space currently on the market is 25,852,096 sf, according to their calculations.
"I think people have gotten the impression that there's been a wholesale flattening of this market, but when you slice and dice the numbers, that's really not the case," Coddington tells GlobeSt.com. "If you're not talking far northwest Austin and you're not talking about 10,000 or less, there really hasn't been that much of a change in the market."
Coddington and Childers have analyzed the space by amount and location. Of the space available, 60 had been subleases of 10,000 sf or less. By comparison, 22 had been over 10,000 sf and of those only six had been in excess of 30,000 sf. Better than half of that space, or 407,000 sf, had been situated in the far northwest submarket, where many venture-backed, high-tech companies are located.
"The story that is there is that if you are a larger tenant in this marketplace, you probably don't have any more choices than you did in the past," Coddington says. "On the other hand, if you're looking for a small opportunity, you're probably going to find more variety."
Even with the revised figures, Austin's sublease space is the highest it has been in a number of years, say the brokers. Childers adds, however, that the quality of the sublease space being released on the market, even in limited pockets, is much better higher than expected.
"A lot of these companies had 'blue sky' projections for their business plans," says Childers, adding that many companies decided to hold space in reserve for projected future growth. "They knew they were competing very stringently for the labor pool, and many of them made the decision to take down nicer space than you might expect." Many of the sublease decisions are being made at corporate headquarters, says Coddington.
Both brokers expect the space to remain on the Austin market while corporations take a defensive approach to maintaining their competitive positions. Coddington is a broker in Colliers Oxford's investment properties division of Colliers and Childers is a principal in the office leasing division.
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