Sublease space is entering the office market this year at a much slower rate than in 2020, according to a new report from Cushman & Wakefield, and all signs are pointing toward a continued decline in growth. 

About 11.7 million square feet of vacant sublease space was listed in the first quarter of this year, a decrease from the 16.4 million square feet added in the fourth quarter of 2020. For the sake of comparison, 19.4 million square feet was added in the third quarter. Of the 138 million square feet of negative absorption that has occurred during this economic cycle, 41%—or 56 million square feet—was related to the increase in vacant sublease space.

The Cushman report also notes that companies have been more aggressive than usual in listing sublease space than they were during the Great Financial Crisis. Between 2008 and 2010, 33.1 million square feet of sublease space hit the market and accounted for 32% of the -99.9 million square feet of negative absorption posted during that time. But the rate was much slower and accrued over two years—about 4.7 million square feet per quarter. Conversely, the post-COVID era has shown 14.1 million square feet of negative absorption over the last year. And the peak sublease vacancy rate during the Great Recession was 1.8% of total inventory at year's end in 2009, as opposed to 2.3% today.