Advertisment

High-Profile Subleases and Discounted Rates Shape the Industrial Real Estate Market

The industrial sublease market is brimming with significant listings in Orange County, Los Angeles County, and the Inland Empire. High-profile opportunities, like Moov Technologies' sublease in Tempe, and prime locations such as the property in Henderson, Nevada, offer buyers the chance to secure valuable spaces at discounted rates. The intricate dance of discounts and dilemmas continues, shaping the future of industrial real estate.

author-image
Israel Ojoko
Updated On
New Update
High-Profile Subleases and Discounted Rates Shape the Industrial Real Estate Market

High-Profile Subleases and Discounted Rates Shape the Industrial Real Estate Market

In the ever-shifting landscape of industrial real estate, Orange County currently boasts 92 listings exceeding 50,000 square feet, with 12 of these being subleases - a significant 13%.

Advertisment

Neighboring Los Angeles County isn't far behind, hosting 497 listings, 73 of which are subleases, amounting to a substantial 14.6%. The Inland Empire follows suit with 245 listings, 34 of which are subleases, constituting a sizeable 13.8%.

The Sublease Market: A Dance of Discounts and Dilemmas

A closer look at these figures reveals an intriguing trend: most givebacks occur in spaces surpassing 100,000 square feet. This phenomenon is particularly noteworthy as subleases that closely resemble direct leases, offering occupants ample time to distribute moving costs, are considered the most valuable. These subleases can exert a downward pressure on market lease rates, as occupant/sub-landlords frequently price their subleases at a slight discount compared to direct leases.

Advertisment

However, it's worth noting that a sub-lease must offer an astonishingly low price to garner significant demand. The tenant remains accountable for the lease obligation, even with a surrogate in place, adding an intriguing layer of complexity to this dance of discounts and dilemmas.

Moov Technologies: A High-Profile Sublease Opportunity

A prime example of this trend is Moov Technologies' decision to sublet up to 31,000 square feet of its office space in Tempe's coveted 100 Mill building. This strategic move aims to reduce the company's footprint in the area while focusing on growth in other locations.

Advertisment

This high-profile sublease opportunity could potentially offer a discount to companies seeking a prime location, as sublease rates in the Tempe area are estimated to be 25-30% lower than direct leases. With Tempe office spaces currently commanding $39.65 per square foot for a direct lease, Moov's decision may provide an attractive option for buyers in the industrial sublease market.

Henderson's Industrial Sublease Market: A Prime Location

Meanwhile, in Henderson, Nevada, the industrial sublease market presents another compelling opportunity. The property located at 1239 North Boulder Highway boasts one space available for sublease, spanning an impressive 87,120 square feet. The lease rate for this space is negotiable, and the build type offered is a full build-out.

Advertisment

Situated in the Midway neighborhood of Henderson, this property is part of a thriving industrial scene, with 44 industrial spaces available for lease, totaling an expansive 4,196,295 square feet. The average asking rate for industrial space in the neighborhood stands at $1.21/SF/YR.

As the dance of discounts and dilemmas continues in the industrial real estate market, opportunities like these offer a fascinating glimpse into the intricate world of subleases. The players in this market must navigate a complex landscape of lease obligations, discounted rates, and prime locations to secure the best deals.

Today's date: 2024-02-10 13:05:58.679767

In conclusion, the industrial sublease market continues to thrive, with significant listings in Orange County, Los Angeles County, and the Inland Empire. High-profile opportunities, such as Moov Technologies' sublease in Tempe, and prime locations like the property in Henderson, Nevada, offer discerning buyers the chance to secure valuable spaces at discounted rates.

The dance of discounts and dilemmas persists, as tenants and sub-landlords alike navigate this intricate landscape, shaping the future of industrial real estate.

Advertisment
Advertisment