Office Space and the Economy

Office occupancy numbers are trending in the right direction – for now.  Demand for office space is rebounding nationally.  In Manhattan, the commercial real estate market posted strong numbers in the first quarter of this year.  Leasing activity in New York City reached its highest quarterly total since the end of 2006, according to Cushman & Wakefield.

Across the country, vacant office space is being absorbed, businesses are cautiously expanding and the national vacancy rate is creeping lower.

While occupancy is on the rise, so too are the number of job openings nationwide.  The latest figures released from the Labor Department said that employers advertised more than 3 million available jobs during the month of February, which is the most since 2008.

The increase in employment ads signals that businesses are more confident about the stability of the economy and are prepared to invest in new workers.   A byproduct of these new hires is that businesses will require more office space to accommodate its expanding workforce.   However, before committing, businesses must carefully evaluate how much office space they truly need before signing on the dotted line.

We still need hundreds of thousands of jobs each month to make a significant impact on the unemployment rate.  Let’s hope a strengthening office market could be an indicator of good things to come for the balance of the year.