By AZRE | Via AZBigMedia
Sublease availability has become a noteworthy element of the office market, increasing approximately 133 percent year-over-year since last September, according to a report from Colliers International. As a result, Colliers has adjusted its research tracking policies. Sublease space is now listed in availability but will not be factored into direct vacancy or net absorption figures. As long as the original tenants are adhering to lease obligations and paying rent on space, their vacating of square footage will not impact absorption or market vacancy in Colliers reports. However, if a tenant defaults on a lease and the space is handed back to the landlord, the square footage will then be counted as negative net absorption and an influence on vacancy.
The Greater Phoenix office market remained relatively healthy during third quarter, despite impact of the COVID-19 pandemic. As companies are evaluating the return of employees to the workplace, Phoenix continues attracting companies looking to expand or relocate. They are choosing Greater Phoenix because of its low cost of living business-friendly culture and a growing, talented workforce. While the city experienced a significant uptick in sublease availability, landlord-controlled space posted 109,718 square feet of positive net absorption during the past three months. Class A Sublease space now comprises approximately 1.12 percent of the total office inventory.