Uber Technologies’ recent move to put more than 115,000 square feet of its Deep Ellum offices on the market is part of a trend.
The California-based ride-hailing company had planned to occupy the more than four floors of offices, but they are now sitting empty.
With the pandemic and recession, dozens of companies around North Texas are finding themselves awash with surplus office space. Almost 60% of local office employees are still working at home.
“We are just under 8 million square feet of active sublease office space in the D-FW markets,” said Andrew Matheny, a research manager for commercial real estate firm Transwestern. “It’s a historic level in terms of gross square footage.”
The amount of surplus sublease office on the market is significantly greater than the 5 million square feet or so under construction.
Matheny has been tracking the North Texas sublease office market since earlier this year when the COVID-19 lockdown sent office workers home and caused a slowdown in building leases. “Right at the end of June, it started rising sharply,” he said. “We had about 1.3 million square feet listed in August alone.”
Matheny said that while the flood of excess office space coming up for lease has slowed recently, the numbers are still big. “The upper Dallas North Tollway market (in Plano and Frisco) has been ground zero for it,” he said. “That’s where you have the corporate headquarters and the companies most impacted by not just what is going on here locally.
“We’ve seen a little bit as well downtown and Uptown.”
Along with the Uber sublease in the Epic development in Deep Ellum, one of the largest blocks of the space up for grabs is more than a half million square feet Liberty Mutual Insurance is offering in its new Legacy West office campus in Plano.
Matheny said more than 40% of the sublease offices available in D-FW had terms as long as three years.
“It can be a good short-term solution for space,” he said.