C&W's McCarthy: Office Will Recover…Slowly

NEW YORK CITY—Despite only modest new construction, CRE executives expecting the office market to rebound fully—and even soar above recession levels—are in for a disappointment. The sector likely will continue to recover at a sluggish pace due to an increase in office space efficiency, Cushman & Wakefield chief economist Ken McCarthy tells GlobeSt.com EXCLUSIVELY.

“There certainly was a lot of optimism at the beginning of the recovery that the lack of construction would lead to absorption and we’d get to a good vacancy rate,” he says. “But the drive to space efficiency has meant demand isn’t rising as fast as in the past, and that is holding up the vacancy rate.”