Sublet inventory remains abundant and competes with prime space for tenants looking for space at a significant discount to the direct market. The majority of available sublet inventory remains high-quality space that was placed on the market as a result of the hybrid workplace environment and tenants reevaluating space needs after COVID 19.
Key Takeaways
- Vacant sublease space makes up 3% of total vacant space in Northern Virginia. Class A sublet space makes up 75% of the vacant sublet inventory while Class B accounts for 23.5% of all the vacant sublet inventory. Vacant sublease space in Northern Virginia saw a 2.5% drop in sublease vacancies from Q1 2023, down to 825,560 SF vacant.
- Sublease activity comprised of 161,528 SF, nearly 24%, of all new leasing activity in the first quarter of 2023, a 252% increase from Q1 2023.
- The largest sublease of the quarter was at 14295 Park Meadow Drive in Chantilly where Arcfield took 124,000 SF. Arcfield subleased the full building from Peraton who is downsizing in the area.
- In the second quarter of 2023, asking rents for subleases averaged $28.39. Sublease rents are on average almost $7.00 cheaper than direct asking rents.
- The largest sublease available on the market is Gartner’s 314,708 SF block at 1201 Wilson Boulevard in Rosslyn.
- After four years of steady quarter-over-quarter increases, total available space on the sublease market decreased 4.3% from Q1 2023 to 5.7 MSF to end the second quarter.
- The Rosslyn-Ballston Corridor continues to hold the most available sublease space on the market with 1.5 MSF while Reston/Herndon has 1.1 MSF of available sublease space.
