Another 50,000 SF Hits Sublease Docket in Southwest Submarket

AUSTIN-Another 50,000 sf of sublease space is on the market courtesy of Forgent Networks Inc. The company, which develops software for videoconferencing, says it doesn’t need the space and is trying to cut costs.

The company had about 400 employees several years ago and leased 130,000 sf to house them. In last week’s earnings call, the company said it has fewer than 100 employees in Austin, resulting in “significantly underutilized office space.” Its offices are at 108 Wild Basin, one of several office buildings off the Capital of Texas Highway in the southwest submarket.

Forgent took a $2.1 million charge against its earnings in its fourth fiscal quarter ending July 31. The charge was calculated on the “rate and pace” it can make for sublease deals. The company said subleasing the space will reduce operating expenses by $300,000 per quarter.

A Forgent contact was unable to provide further information about the company’s plans to sublease the space. The company’s subleasing efforts will be made in a different environment than its previous efforts. In its 1999, 2000 and 2001 fiscal years, Forgent, under its previous operating name, Vtel Corp., subleased 41,000 sf. In a filing with Securities and Exchange Commission, the company said it was able to take advantage of a “favorable real estate market.” The southwest submarket’s vacancy rate was 23.7% at the end of the second quarter, including 750,000 sf of sublease space.