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Sublease Space Will go Away, Expert Predicts

DENVER-"The psychological impact of having 3.4 million sf of subleased space is huge," says Nick Pavlakovich, a senior director and top office broker at Cushman & Wakefield. That would push the overall office vacancy rate to 18%.

By John Rebchook | Updated on December 26, 2001

DENVER-There’s currently about 3.4 million sf of sublease space on the market, says Nick Pavlakovich, a senior director and top office broker at Cushman & Wakefield. That, to a large part, is contributing to the overall office vacancy rate, which he estimates at 18%, a bit higher than other firms put it at.

He estimates the Central Business District’s office vacancy rate at 13%, the southeast suburban’s office vacancy rate at 22% to 23%, and northwest corridor’s vacancy rate at 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 of 2002, he predicts.

Pavlakovich estimates only 350,000 sf to 400,000 sf of the sublease space hasbeen leased. Yet, a closer examination reveals that the sublease space is not as dire as it has been in other downturns, he says.

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