St. Louis sublease space rises as firms cut workers - St. Louis Business Journal:

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There’s currently 322,417 square feet of sublease officew space available inthe St. Louis the highest level in at leasfour years, according to . That is a smalkl fraction of the total availablrspace — just under 50 million square feet in the metrp area. Even so, commercial real estatd brokers say the increasing availabilitty of sublease space is good news for regardless ofwhether they’re looking for short- or long-terkm space. A-B InBev is vacating 150,000 squar e feet of space in three buildingsa in Sunset Hills this yearand 45,000 squaree feet at Plaza downtown.
Real estats sources said the brewing giant may ultimatelyg sublease several hundred thousand square feet of space in Sunsef Hills before the year is over as it seeks further One office tenant that has already subleased a portion of thespacd AB-InBev is unloading is GroupCast LLC, a voice-message broadcasting servicre that leased 15,584 square feet at 9735 Landmarl Parkway in April. Terms of the deal were not As job losses the impactto St. Louis will be more acutely felt in the seconed halfof 2009, say real estat e experts. That’s because new sublease space typically lags a layoff announcementf by six months toa year.
“Everyoner continues to see thestorm coming,” said Chriws Fox, managing director of Gateway Commercial/ . Fox said the St. Louie office market hasn’t been as negatively affected by the economic downturm as other markets nationally because the office market was not overbuilt here inrecenyt years. But many large corporationse are looking to cut costs by closingy or consolidating smallerregional offices.
“We’re starting to see some give-bacjk space in smaller sizes, the under 10,000 square feet category, as regiona l sales offices of largecorporations consolidate,” Fox In late 2008, GMAC Financial Services announcer it was closing 200 mortgage offices nationally, includingb one in St. Louis. The closure put 27,000 square feet of officse space back on the market innorthh St. Louis County. Other financial institutions also are scaling back their realestate needs. recently subleased 11,500 square feet of offic e space to at120 S. Centraol Ave. in Clayton.
The law firm is paying $10 per square foot less than the askin g rental rate ofaboutr $25 per square foot for the five year s remaining on the lease. LaSalle Bank was acquiredd by Bank of America in October 2007 and adoptec the Bank of America name inMay 2008. The leasew included office furniture, a common perk in sublease deals. Brokers call the trend “plug and play” becausew the office typically comes furnished and can come with renta rates up to 50 percent lower than askinhrental rates.
“We think the sublease opportunities are going to increase through at leastr the first quarterof 2010,” said Lynn Schenck, executive vice presideng of Jones Lang LaSalle, which represented Reeg & Steve Schmid of Cresqa Partners said the increased level of subleasde space will benefit sizable officd tenants because large blocks of available space are hard to find in the St. Louise area. Currently, there are less than a dozen options for tenante lookingfor 50,000 square feet or Subleased space also is handy for tenants who are uncertainb about their futures in this economy, Schmifd said.
“There are great opportunities for tenants that have volatilituy in their business and are looking for operatinb flexibility and minimizing their capital outlays for capital he said.