US Office Space Demand on a Slow Track
As the economy of U.S. is slowly recovering, employers are positive about hiring new talent. Diversification may also be possible in the employment and business sector. However, the hiring drive will be cautious and selective to accommodate and welcome only the best of the best in the company.
In the fourth quarter report of 2012 done by Reis Inc, a research firm, it was revealed that demand for office space was still slow and needed to accelerate. Only a minuscule growth was observed in the sector. Vacancy rates were down by 0.1 percent and the office space increased by 3.7 million square feet on the whole in the quarter. Renting prices went up to $28.46 per square feet, reports Wall Street Journal.
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The rate of unemployment stood steadily at 7.8 percent. Experts opined that if the employment conditions don't strengthen, it was likely that the demand for office spaces won't grow either, reports Reuters.
The sluggish demand has also induced the developers to cut back on office construction as they find no profit in the sector. It is believed that the increasing dependence and usage of telecommunication and internet enabled communication facilities has led to choking of office spaces. Companies are consolidating their offices to cut down on costs in the wake of the economic recovery, reports Institutional Real Estate Inc.
Areas like Orange County, California and Atlanta have had some tough luck in the office space demand. Office rent in Tucson, Arizona and Las Vegas fell by 0.5 percent in 2012, reports Wall Street Journal.
However, since some industries like the consulting and software sectors are banking on hiring and recruiting more people, it is forecast that more accommodation facilities will be needed by these industries. These industries are largely intensified in areas like Seattle, San Francisco and Silicon Valley. It is expected that office space demand might rise in these areas, reports Institutional Real estate Inc.