Office Space Sales Are Up, Wall Street Journal Reports
The Wall Street Journal recently reported that U.S. office buildings are seeing an increase in tenants. An extra 8.2 million square feet of office space was rented in the second quarter, making it one of the strongest periods since the recession. These sales showed an office vacancy rate of 16.6%, down from the 2010 peak of 17.6%, with a 3.2% rise in average square foot price.
Finding office space is still a tricky task for most. The market growth is still dragging, and employers are occupying 36 million fewer square feet than they were in 2007. Analysts believe that one of the factors causing the gap is that employers are accessing more private offices, denser spaces, and offices with larger cubicles for more relaxed layouts. Reis economist Ryan Severino commented:
“I don’t think we’re in the clear yet, but we are definitely heading in the right direction,” said Reis economist Ryan Severino. “It has taken a little bit longer than usual to get back to where we’d like to be….For the next 12 to 18 months or so, it’s definitely going to be a little bit dicey there.”
With almost 28 million small businesses in the U.S., it’s possible that many businesses have been migrating towards home or digital offices. Higher market prices and increasing digital enterprise may not help with trying to clear that vacant space, but despite these factors, job growth is still increasing.