June 25, 2013
America’s corporate occupiers are not only reducing the amount of office space they use, they are changing their requirements too according to the latest Office Occupier View report from CBRE. Not only did overall demand for commercial space fall during the first quarter of 2013 compared to the last of 2012, the average amount of space allocated to each worker is falling below 225 sq.ft. (21 sq.m.) , and occupiers are demanding more open, ‘creative’ working environments in Class A buildings with large floor plates. Occupiers are also looking for space that is ideally located in central business districts (CBDs) with easy access to transport links and amenities and offers them flexible terms.
‘Many occupiers, particularly in the technology sector, are placing a premium on close collaboration and regular interaction as a way to foster innovation among creative knowledge workers,’ said Brook Scott, CBRE’s head of Americas occupier research, global research and consulting. ‘Demand for creative space that facilitates this collaboration and interaction continues to take hold in major markets across the country.’
The changing structure of the market for corporate offices in the US is evident in a number of trends identified in the report including:
- Lack of construction activity and increased demands for specific types of offices are driving significant rent increases in certain urban districts.
- The same forces will restrict access to the most desirable types of buildings although occupiers are reducing their demand for space overall.
- Firms are following the UK model of working in more open plan spaces, often with shared bench desks as they look to increase workstation utilisation rates from about 30 per cent to 60 per cent.
- Location is essential as a way of attracting talent with easy access to transport links and amenities such as restaurants, shops and entertainment key.
- There is growing demand for ‘third spaces’ which move occupiers away from traditional leases, something CBRE is exploring itself with its WorkShop model but is evident in the approach of firms like Regus.
- There is growing demand for space from tech companies, especially in those parts of the country that foster the TMT sector, but the US public sector continues to reduce its demand for space.