National Office Vacancy Rates Rise in Second Quarter

Data released from New York-based research firm, Reis Inc., reported office vacancies in the U.S. continue to climb and reached 17.4 percent in the second quarter of this year.  These are the highest levels since 1993.   

Analysts cite a jobless recovery and global economic concerns for the increase in vacancy rates as businesses are reluctant to commit to space they are not sure they will need in the future.  Bucking the downward trend is New York City — the nation’s largest and most expensive office market. Second quarter vacancy rates dropped in midtown and downtown locations, and were well below the national average — a possible sign economic green shoots are starting to take root in the Big Apple.

Uncertainty is probably the most obstructive hurdle businesses are facing today.  Signing a long-term lease when a business can’t adhere to a long-term plan doesn’t make sense.  Companies should be careful not to repeat the property decisions of the past that left them straddled with underutilized space today.

Technology and the rise of the mobile worker are the top factors impacting the real estate decisions in the 21st Century.  The ability to get work done anywhere at any time will allow business to quickly capitalize on business opportunities.  Long-term lease agreements do not complement this new way of working.