Trend: Office Space is Shrinking


The office footprint is shrinking per worker. Since the 1970’s the average square feet per person (utilization) has fallen by 30% or more every twenty years (see graph). In the past two years alone, utlization has fallen 22% from an average of 225 sf per worker to 176 sf. It is expected to drop to 151 sf or less over the next five years.

The driving factors aretwo-fold: companies that are looking to save money by creating efficiencies within their real estate and a new generation of workers that have become accustomed to laptops, preferring flexibility over the prestige of a personal office. In the process, companies are creating more collaborative workspaces and new telecomMuting and touchdown spaces, while earbuds have become the new sound barrier over traditional walls. (Source: USA Today, June 2012)

This trend has several implications. As leases come up for renewal, companies will be looking to do more with less. Even as employment increases, demand for office space may not increase at the same rate as in the past. Landlords of buildings that were built before 2005 may find their buildings becoming functionally obsolete as more workers occupy less space. Parking,restrooms, and HVAC systems may not have the capacity to handle more people than originally designed to accommodate. Tenants should keep these trends in mind especially when signingl ong-term leases, and landlords should start preparing now for a future increase in capacity.

Read the MBJ article featuring Kemp Conrad.