Slowing demand in the industrial sector has led to a significant increase in available sublease space in recent months, and that trend is expected to continue in 2023. Total square footage of available industrial sublease space has jumped nearly 46 percent, according to a report from Colliers. Of the available space, there is an elevated number of larger spaces, those of which measure 200,000 square feet or more. Amazon, the largest corporate owner of industrial space in the country, closed several of its facilities last year, postponed the openings of new warehouses, and reportedly put 48 spaces on the sublease market. Last May, reports emerged that the e-commerce giant was looking to sublease up to 30 million square feet of warehouse space.
Despite industry concern over the impact of Amazon’s warehouse pullback on the industrial market, the Colliers report found that the company was not the primary driver of increased available sublease space. The most industrial space put up for sublease over the last 12 months actually came from companies in the manufacturing sector. Subleased space from general retail and wholesale companies accounted for 20 percent of sublease space over the last 12 months, while e-commerce users only accounted for 17.7 percent. The rise in sublease space was driven in part by rising interest rates, weak consumer confidence, and other economic headwinds.