From “Industrial Subleasing Is on the Rise But Shouldn’t Affect Absorption” – Globe St.

Industrial sublease space is increasing as more tenants see it as a viable way to earn revenue, and landlords are attracted to its potentially shorter lease terms.

However, even though subleasing has more than doubled compared to a year ago, it still represents only less than 1 percent of the nation’s total industrial inventory.

Firms Leased Large Volumes When Scarcity was Acute

Adam Roth, executive vice president, industrial services, NAI Hiffman, tells GlobeSt.com that the unreliable supply chain caused corporations to miss sales due to displaced inventory.

“The result of this was in 2022, corporations mandated their product be on the continent, therefore, increasing their inventory and real estate footprint to not miss a sale,” Roth said.

In 2023, as the supply chain unwinds and dependability returns, “corporations are right-sizing their footprint as traditional trade flow patterns resume,” Roth added. “Therefore, there will be an increase in sublease vacancies; however, due to the record-low industrial vacancies, I don’t see this as a concern.”

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About NAI Hiffman:

NAI Hiffman is one of the largest independent commercial real estate services firms in the US, with a primary focus on metropolitan Chicago, and part of the NAI Global network. We provide institutional and private leasing, property management, tenant representation, capital markets, project services, research, and marketing services for owners and occupiers of commercial real estate. To meet our clients’ growing needs outside of our exclusive NAI Hiffman territory, we launched Hiffman National, our dedicated property solutions division, which provides property management, project services, and property accounting services across the country. NAI Hiffman | Hiffman National is an award winning company headquartered in suburban Chicago, with more than 250 employees strategically located throughout North America.

About Hiffman National: 

Hiffman National is one of the US’s largest independent commercial real estate property management firms, providing institutional and private clients exceptional customized solutions for property management, project management, property accounting, lease administration, marketing, and research. The firm’s comprehensive property management platform and attentive approach to service contribute to successful life-long relationships and client satisfaction. As a nationally bestowed Top Workplace, and recognized CRE award winner, Hiffman National is headquartered in suburban Chicago, with more than 250 employees nationally and an additional six hub locations and 25 satellite offices across North America.