Although United States companies are hiring more employees and the labor force has finally surpassed its pre-recession peak, the vacancy rate for office space stood at 16.7 percent in the fourth quarter, down only slightly from 16.9 percent a year earlier.
This slow office recovery is due to a number of reasons, including companies’ wishes to cut costs by not taking up additional space unless it is absolutely necessary, and shifting workstyles that are shedding spacious private offices into cubicles and thus, fitting more employees into less space.
However, analysts believe this slow streak will soon come to an end because companies are running out of room to keep growing in their existing spaces. Office demand in many markets is at an all time high because of the rapid job growth, pushing up rents and occupancy levels.
“Employers started to hire, but they were only filling empty desks,” said Deborah Moy, a principal at Linneman Associates, a real-estate consulting firm. “We just think it’s a little bit of a catch-up time.”