The last recession unleashed a torrent of sublease space that wreaked havoc in downtown towers and in Rt. 128 office parks alike. In the wake of the the tech market collapse, a raft of companies dumped space directly on the market, bypassing building owners and landlords.

The numbers were not always picked up by commercial real estate firms in their market reviews, often preferring to crunch vacancy numbers by looking at space put directly on the market by tower owners. This might have looked good on paper, but it failed to take into account how bad market conditions had become.

At one point more than 12 million square feet of sublease space was clogging the Boston market in the tough first few years after the 2001 recession. That’s enough for a dozen Prudential towers.

Well sublease space is back, and this time, the commercial real estate industry is taking notice. Jones Lang LaSalle, in its just released fourth-quarter report on the Boston and U.S. office market, devotes a fair amount of ink to the issue,

Sublease space in Boston jumped by half a million square feet during the fourth quarter, the firm reports, bringing the total amount on the market to 4.5 million. Still a far cry from that 12 million square feet of sublease space that flooded the market during the last downturn, but still moving in the wrong direction,

Overall, Jones Lang LaSalle forecasts rising office vacancy rates  across the U.S. right into 2010, when it sees the amount of empty office space peaking at 18 to 20 percent.

And that’s with sublease space included.

This entry was posted on Friday, February 6th, 2009 at 11:07 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.