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C&W: Sublease Space Isn't Like Yesteryear

DENVER-A close look at the 3.4 million sf of sublease space shows it's not as bad as it seems, says a Cushman & Wakefield of Colorado senior director. Sure, it's driving up vacancy, but the shelf life for most space is a lot shorter than in previous downturns.

By John Rebchook | Updated on December 07, 2001

DENVER-It looks worse than it is when it comes to the region’s sublease space, says a Cushman & Wakefield of Colorado Inc. senior director and top producer.

Right now, there is about 3.4 million sf of sublease space on the market, says Nick Pavlakovich. To a large part, that is driving the overall office vacancy rate, which he estimates at 18%, a bit higher than other firms put it. He pegs the CBD’s office vacancy rate at 13%; southeast suburban at 22% to 23%; and northwest corridor, 35% to 40%. And another 750,000 sf to 850,000 sf of sublease space will hit the market by the end of the first quarter 2002, he predicts. Meanwhile, he says only 350,000 sf to 400,000 sf of the subleased space has been leased.

Still, a closer examination reveals that the sublease space is not as dire as it has been in other downturns, Pavlakovich says. “The big difference in earlier downturns is that the sublease space had five to 12 years left on its term,” he says. “Now, we’re dealing with sublease space for two to three years at the most.”

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