The future of the office market rests in one question: Will employees return to the office. If you review current leasing trends, the answer is not clear. The tech, life sciences and health care industries are driving office leasing activity, and many are expanding their footprint. However, other industries are going in the opposite direction and shrinking in size.
Scott Nelson, CEO of occupier services at Colliers, spoke exclusively to GlobeSt.com about the trend. Nelson saw an increase in office demand in late 2021, but he said the activity had come with some notable downsizing activity. “We saw higher demand from high-growth industry sectors and small to medium-sized businesses, but we also saw some large office space users across multiple industries, including professional services, who are running out of space,” he told GlobeSt.com. Told. , “Looking at you both.”
The trends are industry specific. While technology, life sciences and healthcare are on the rise, more traditional office users, particularly financial services firms, are reducing their office footprint. “It really depends on the profile of the business. In major cities, tech users are doubling,” Nelson says. “Facebook and Google in New York; Oracle in Austin and Nashville; Google in Atlanta. Like Deloitte, PwC, EY Large professional services firms, which are some of the largest occupants of office space, are looking to reduce size in major urban cores and provide more flexibility for their people.
While the jurisdiction has been reserved for major metros, where most of these major office-using firms are headquartered, renewed leasing demand is being seen among those in expansion mode in both large cities and secondary markets. has been “Mega-cities around the US saw some significant leasing activity and increased demand for occupiers,” Nelson says. “And, it was not only mega-cities, but high-growth markets like Raleigh, Austin, Nashville and Tampa also saw a lot of activity. Those markets are attractive from a labor force perspective.”
For downsizing companies, many are relaying more to suburban locations. “They’re not opening new suburban spaces because they’re seeing a reduction in the amount of space they need moving forward, but they’re making sure their workplaces in suburban markets can accommodate the new way of working.” ,” Nelson explains.
Looking ahead, Nelson says there remains a lot of uncertainty about workplace structure and the amount of space companies will need. His advice is to use the data. “We are advising all clients to make sure they have the tools to analyze how the space is being used, and to get the data into position to analyze the data and develop strategies with that data. ” “That’s the real focus.”