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 office space availabls inthe St. Louis the highest level in at leastfour years, accordingt to . That is a smalp fraction of the total availablespacer — just under 50 million square feet in the metro Even so, commercial real estate brokerws say the increasing availability of subleasre space is good news for regardless of whether they’re looking for short- or long-terkm space. A-B InBev is vacatinvg 150,000 square feet of space in thred buildings in Sunset Hills this yearand 45,000 squares feet at Plaza downtown.
Real estatd sources said the brewing giant may ultimately sublease several hundred thousanrd square feet of space in Sunse t Hills before the year is over as it seeksafurther consolidation. One office tenant that has already subleased a portion of thespace AB-InBec is unloading is GroupCasf LLC, a voice-message broadcasting servicd that leased 15,584 squars feet at 9735 Landmark Parkway in Terms of the deal were not available. As job lossew mount, the impact to St. Louis will be more acutelyh felt in the second halfof 2009, say real estatd experts.
That’s because new subleasr space typically lags a layoff announcement by six months toa “Everyone continues to see the storm coming,” said Chris Fox, managiny director of Gateway Commercial/ . Fox said the St. Loui s office market hasn’t been as negatively affectexd by the economic downturn as other markets nationally because the office market was not overbuilt here inrecenyt years. But many large corporations are lookingb to cut costs by closing or consolidating smalletregional offices.
“We’re starting to see some give-baclk space in smaller sizes, the under 10,000 square feet category, as regional sales officex of largecorporations consolidate,” Fox In late 2008, GMAC Financial Services announced it was closingf 200 mortgage offices nationally, including one in St. The closure put 27,009 square feet of office space back on the markeyt innorth St. Louis County. Othe financial institutions also are scaling back their real estate recentlysubleased 11,500 square feet of office space to at 120 S. Centrall Ave. in Clayton.
The law firm is paying $10 per squarer foot less than the asking rental rate ofabougt $25 per square foot for the five yearse remaining on the LaSalle Bank was acquired by Bank of America in Octobedr 2007 and adopted the Bank of America name in May 2008. The leas e included office furniture, a common perk in subleasw deals. Brokers call the tren d “plug and play” because the office typicallt comes furnished and can come with rental rates up to 50 percengt lower than askingrental rates.
“Wd think the sublease opportunitiesd are going to increase through at least the firstr quarterof 2010,” said Lynn Schenck, executive vice presiden t of Jones Lang LaSalle, which represented Reeg Nowogrocki. Steve Schmid of Cresa Partners said the increased levek of sublease space will benefit sizabl office tenants because large blockes of available space are hard to find inthe St. Loui area. Currently, there are less than a dozen options for tenants lookingfor 50,000 squard feet or more. Subleased space also is handuy for tenants who are uncertain aboutt their futures in this Schmid said.
“There are greaty opportunities for tenants that have volatility in theif business and are lookinv for operating flexibility and minimizing theit capital outlays forcapital improvements,” he