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Office Sublease Pressure Builds to Eight Mil SF

DALLAS-Sublease space is about double the norm, say researchers in their latest reports of the Dallas-Ft. Worth market. Still, there's a take-it-on-the-chin optimism that bargaining table strategies, for the most part, are keeping a lid on the pressure cooker.

By Connie Gore | Updated on October 29, 2001

DALLAS-The Dallas-Ft. Worth office market is looking grimmer with each passing day although area executives cling to the positive. Sublease space has spiked 1 1/2 million sf in the past quarter, with statisticians now saying the grand total is eight million sf or more than double the norm for the region.

Free rent is commonplace and practically a given, says Jim Lob, senior vice president of Grubb & Ellis Co.’s Dallas team. “The one trend, that’s absolutely a fact today that reminds me of the mid-1980s, is the prevalence of free rent associated with nearly every single office transaction,” he tells GlobeSt.com.

Those sitting at the bargaining tables know all too well what’s happening in a market with an estimated 180 million-sf office inventory. Greg Biggs, Julien J. Studley Inc.’s senior vice president and southwest region manager in Dallas, says the trend he’s seeing these days is a restructuring of leases to make it more affordable in the early years. “There’s still activity in the marketplace, but what you don’t have are businesses expanding,” he assesses. “This market is a function of the economy.”

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