A growing group of tenants, buffeted by layoffs, a sudden recession and uncertainties whether the workplace will be supplanted by remote work strategies adopted during the lockdown, have cast space on the market for sublease.Tenants such as Airbnb, Yelp, Allianz, and Macy's are tossing big blocks of sublease space on the office market.
The offerings also come as companies rethink the workplace and adopt remote work strategies employed during the lockdown. Moda Operandi, the online luxury apparel site, which sells upscale brands such as Prada, Oscar De La Renta, and Dolce & Gabbana, had big real estate plans to match its prodigious fundraising in recent years.
Wunderman Thompson, an advertising subsidiary of WPP, is seeking to sublease almost 200,000 square feet at 237 Park Avenue along Manhattan's most prestigious office corridor, according to three sources familiar with the company's plans. A spokeswoman didn't immediately respond to a request for comment.at its new global headquarters in Long Island City, an offering that totals roughly 40% of the office.
Currently there's a total of about 10.5 million square feet of sublease space on the market, CBRE said. Although that's significantly less, the city is still early into the current downturn. Given the scope of the job losses so far, some experts say the amount this time could end up even higher than those two prior recessions.
One of the surprises of the Covid-19 crisis, which drove the US economy into a recession in February, has been the relative lack of new sublease space so far. In New York City, tenants offered roughly 340,000 and 234,000 square feet during April and May respectively, according to CBRE. That was a fraction of the roughly 800,000 square feet added on a monthly basis on average during the two years prior.
The office is dead, according to most startup founders 60% of CEOs polled said no impact on their workers’ productivity. 16% said productivity actually increased 71% would let employees continue to work remotely when restrictions lifted.
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