Office leasing in the U.S. could continue to improve even if hiring slows as existing office space proves insufficient for a growing workforce, according to Cushman & Wakefield global chief economist Kevin Thorpe.
Thorpe noted a growing disconnect between office employment and office space demand. Before the pandemic, the relationship was straightforward – more office jobs meant more demand for space. That changed during the pandemic, when companies reduced office footprints and embraced remote work while continuing to hire.
Today, the U.S. employs approximately 2 million more office workers than before the pandemic, including lawyers, bankers, and tech consultants, many of whom go to the office at least part of the week. Five years after the pandemic, many of the smaller leases are now beginning to expire, and companies are discovering they need more space.
“That gap between office employment, which is nearly at an all-time high, and occupied space, which is the lowest it’s been in over a decade, represents unrealized demand,” said Thorpe.
He said that this unmet demand is starting to emerge in the current market. “Even if office employment remains soft, we could still see continued improvement in the office leasing sector,” he noted.
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