While San Francisco's overall office market has been strong, subleasing has become more prevalent in the Bay Area recently as tech companies aren't hiring as fast as they once were. For example, this month Twitter listed over 180,000 square feet of its San Francisco office for sublease, a sign, some say, that indicates the social media giant's growth plans aren't coming to fruition.
And it appears that trend is also playing out in Chicago, where subleases have also spiked as tech firms are no longer hiring at breakneck speeds.
Sublet supply in Chicago increased by nearly 20% in the last year, and could continue to rise as tech firms re-evaluate their hiring needs, according to a report from commercial real estate services firm Savills Studley. Avant, a Chicago online lending startup that announced plans to lay off 60 employees and will scrap plans to open new business lines in credit cards and refinanced auto loans, is among the tech companies currently listing sublet space in Chicago, Savills Studley said.
"Some companies we’re seeing put their space on the market for sublease are those that were in a scaling mode and were really focused on growth, and anticipated growth through acquisition of talent and headcount needs," said Savills Studley Chicago Region Co-Head Robert Sevim. "When that growth doesn't necessary materialize, you have to mitigate. And that's where we are..."Chicago Office Subleases Spike as Tech Hiring Cools, Report Finds
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