Sublease Glut Hits Austin Office Market Amid Corporate Retreat

Austin’s sublease glut grows as major firms offload office space, pressuring landlords and offering tenants discounted deals.

September 10, 2025

Valerija I.

Austin currently has 4.4M SF of office sublease space available, down slightly from 4.7M SF in Q3 2024.
Corporate heavyweights like Meta, State Farm, 3M, and Home Depot are among those listing large office footprints for sublease.
The oversupply is pushing discounted rents and flexible lease terms but continues to elevate vacancy rates and increase competition among landlords.

Key Takeaways

A Soft Landing — Not Yet

Austin’s office sublease market remains overloaded even as availability has dipped slightly from its peak, reports The Real Deal. According to CoStar, 4.4M SF is currently on the market, a modest decline from 4.7M SF a year ago. But the reduction hasn’t been enough to ease pressure on landlords.

Corporate Contraction

Tech, insurance, and healthcare giants are driving the sublease surge. Meta leads with roughly 552K SF available at Sixth and Guadalupe—Austin’s tallest tower. The space was pre-leased in 2021, but the company never moved in. Now, partial subleases with PwC and another unnamed tenant are in place.

Other large blocks include:

State Farm – 269K SF at 8900 Amberglen Blvd
Superior HealthPlan – 216K SF at 5900 E Ben White Blvd
3M – 204K SF lab-heavy facility at Parmer Austin campus
Home Depot – nearly 200K SF at its former tech hub
GM – 170K SF at 717 E Parmer Lane
Athenahealth – 112K SF at Seaholm Power Plant
Vista Equity Partners – 79,500 SF at its under-construction HQ, The Republic

Together, just seven listings account for over 1.7M SF, nearly 40% of all sublease space available in the city.

A Tenant’s Market—At A Cost

Subleases offer below-market rents, move-in ready buildouts, and shorter lease terms—an attractive combo for tenants navigating economic uncertainty. But there’s risk: if a master leaseholder defaults or exits, subtenants could be left without recourse.

Why It Matters

The persistently high level of sublease space reflects a broader retrenchment in Austin’s office sector. Net absorption has steadied, and new construction has slowed. However, landlords now face competition from deeply discounted, high-quality sublease options. One standout example is Meta’s trophy space in downtown Austin.

What’s Next

Major companies continue to shed office space, and hybrid work remains firmly entrenched. As a result, Austin’s sublease volume is unlikely to drop dramatically in the short term. Until large chunks are absorbed—or leases expire—the city’s office recovery will remain sluggish.