The national office vacancy rate stands at 17.1 percent and is expected to remain elevated longer than previously expected, according to a December 2012 University of California-Los Angeles Ziman Real Estate Center economic letter.
Overall office employment dropped by 245,000 jobs during the last five years, and supply is expected to exceed demand similar to the 1986-1992 supply shock in the years ahead.
The financial services industry has lost 492,000 jobs since 2007 due to increased regulation and pressure to consolidate. Currently both the financial and legal services industries, which are key drivers of class A office space demand, employ the same number of workers as they did 10 years ago.
One notable exception to the bleak office sector outlook is in the computer systems design industry where employment increased by 225,000 jobs since 2007. Technology-driven office markets such as San Francisco, Silicon Valley, Calif., and Seattle have seen rising occupancies and rents with new construction in the pipeline.
Long-Term Office Outlook Is Weak
The national office vacancy rate stands at 17.1 percent and is expected to remain elevated longer than previously expected, according to a December 2012 University of California-Los Angeles Ziman Real Estate Center economic letter.
Overall office employment dropped by 245,000 jobs during the last five years, and supply is expected to exceed demand similar to the 1986-1992 supply shock in the years ahead.
The financial services industry has lost 492,000 jobs since 2007 due to increased regulation and pressure to consolidate. Currently both the financial and legal services industries, which are key drivers of class A office space demand, employ the same number of workers as they did 10 years ago.
One notable exception to the bleak office sector outlook is in the computer systems design industry where employment increased by 225,000 jobs since 2007. Technology-driven office markets such as San Francisco, Silicon Valley, Calif., and Seattle have seen rising occupancies and rents with new construction in the pipeline.
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