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Tech Sector Now a Key Driver of Sublease Space Increases
Although the tech sector has been the main driver of growth for office landlords, quickly changing dynamics are forcing many tech firms to return space in the form of subleases, Savills reports. It’s telling that New York City has slipped from third to sixth place for sublease availability among the major U.S. tech markets, even as its availability has increased since 2020 began.
Even as the tech sector grew during the pandemic, “many tech firms attempted to shed office space as they increasingly embraced remote work styles,” writes Savills’ Devon Munos. “This marked the first-ever decoupling of tech job growth and office demand growth.
“More recently, economic volatility, high interest rates and earnings pressures have pushed the tech sector into cost cutting mode, and sublease inventory is again increasing in markets that are traditionally considered tech hubs at a time when the future office demand paradigm is still in flux.”
- ◦Lease
