A new Newmark report found that despite pandemic-related disruptions, the suburban office market continued to add major occupancies throughout the third quarter of 2020, according to a staff report from the City Biz List.
The new tenant agreements drove positive net absorption to almost 80,000 square feet.
Among the companies that moved into new spaces in the suburbs are Toll Brothers, Mullen Coughlin, and PayPal.
Still, many office tenants decided to sublet a portion or the entirety of their space, which increased the sublease volume in the suburbs by 23 percent to around 1.6 million square feet. It is expected that more sublease space will be added to the inventory in the following months.
Drawn by the lower cost and flexible terms, at least one city-based tenant has subleased space for its suburban employees during the pandemic. Whether this trend will continue is still unclear.
“Speculation about an exodus to the suburbs is high, but so far, we’ve only seen a few smaller companies from the city relocate to the suburbs or start to explore the option,” said Newmark Associate Director Tim Morris. “Time will tell if this becomes a real migration pattern.”
Read more about the suburban office market at the City Biz List by clicking here.
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