Large Corporations Shed Office Space
JPMorgan, Salesforce, PWC Look to Sublease Office Space
These decisions are expected to further depress the commercial real estate market. Many large companies sign leases for office space which can last ten years or more. These corporations can then sublease the space to other tenants.
Subleasing Scramble Drives Real Estate Prices Lower
With so much available office space to lease, rent prices are declining—even for pricey properties. The price to rent an office in New York and San Francisco has declined 17% while office rents are down 13% across the country.
CBRE Group found at the end of last year there was 137 million square feet of available office space for sublease, which marks a 40% increase from 2019 and the highest availability rate in 18 years. The fact that companies are unloading real estate now, even as vaccines are rolling out and some people are making plans to return to in-person work, shows that the trend of working from home may be here to stay in some capacity.
Companies Sublease Swaths of Space Across the Country
JPMorgan is looking to sublease as much as 700,000 square feet of office space located in the downtown area of New York City. The bank began the process earlier in 2021. This marks the biggest block of office space available to sublease in the city.
Meanwhile, PricewaterhouseCoopers and Yelp (YELP) have office space in New York available for sublease while Salesforce is looking to sublease properties in an office in San Francisco. Uber Technologies (UBER) and Wells Fargo & Co. (WFC) are among the other big companies looking to get rid of office space in various cities. The list of major companies looking to sublease could grow even larger as working from home becomes more commonplace.
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