How much office space a company leases is a bellwether not only of near-term space usage, but future growth expectations.

Prior to 2008, corporate office footprints were growing, driven by higher per-employee space allocations and the leasing of surplus space in anticipation of future growth. Since 2009, sq. ft. per employee has declined steadily. This is attributable to both densification strategies and the ‘slack’ that existed in most corporate portfolios coming out of the Great Recession. There was a similar dynamic in the mid-1990s when the economy was recovering from a recession amid an office oversupply.

Despite speculation that the pandemic’s social-distancing requirements would boost per-employee space allocations, such a trend is not yet evident. With the shift to hybrid work, the current space per employee has fallen nearly 5% from already-lean pre-pandemic levels to 152 sq ft. This represents a 22+-year low.

Leaner office footprints can generate significant cost savings, but often leave little room for future growth. This could reflect economic uncertainty or the belief that additional space can be easily procured at attractive rents if and when needed.


Source: CBRE Econometric Advisors