Tenants Not Occupying Same Amount of Space As They Used To
New York City office employment closed 2012 with 1,260,700 jobs, an addition of 108,500 jobs since employment bottomed out at the end of 2009.
Job growth in office-sector industries (financial services, professional services, information services and real estate) is a prime driver for office space leasing. Availability rates remain high, however, because tenants are not occupying the same amount of space that they used to.
If one was to look back to the end of 2006 and its 31.8 million square feet of available space, one would see that the office work force was significantly smaller, by 51,000 employees.
So what does this all mean? Today’s tenants lease less space per employee. Smarter, more efficient space configurations play a big part in this trend. In addition, more firms today build a higher ratio of open space to individual offices to promote more collaborative teamwork. Technology evolution contributes to the need for less space as well.
More employers allow for telecommuting, and the use of webcams allows for virtual teaming to occur seamlessly.
Advanced technology for information storage also decreases the size of physical file space, as well as server space.
Wireless connectivity to the Internet, laptops and cloud computing allow employees to use shared work spaces as their own, shrinking cubicle and office sizes. Expect this shrinking trend to grow as more firms adapt better space utilizations and technology continues to evolve.
Richard Persichetti is the vice president of research, marketing and consulting at Cassidy Turley, with 14 years of NYC research experience