Transcendent metros tackle office market headwinds
Space utilization densification, technological advances and demographic changes are creating headwinds in the path of office space demand. Certain metro areas, however, have advantages that may transcend those challenges.
The number of office-using jobs are growing at a faster rate than the average for all jobs and, as a corollary, office-using jobs is a growing share of all jobs. This trend is not evenly distributed and is most pronounced in technology-concentrated markets, low-cost markets and certain major markets.
Office-using jobs have grown almost three times as fast as office inventory growth since 2009. Nevertheless, the level of new construction is near a 20-year low point. The national office occupancy rate has not yet recovered to its pre–global financial crisis level, and certainly not to the levels experienced in 2000. In New York City, Los Angeles, and Washington, D.C., office vacancy rates are higher than they were 10 years ago.