Office space is one segment of the real estate market that I have not mentioned on this blog yet. A 2010 Los Angeles Times article informed me that the demand for office space in the United States has been decreasing drastically over the last few years. In the 1970’s, companies allocated 500 to 700 square feet of floor space per employee. This number has dropped to just over 200 square feet and is expected to decrease to roughly 50 square feet by 2015. There are several reasons for this.
Without a doubt, the main cause of this is the economic downturn. Large companies simply can’t afford large offices for their employees. This is especially true for corporations with thousands of employees. Just like other businesses, cutting costs has become a major priority.
The new emphasis on teamwork is another factor. Small cubicles and conference rooms conducive to productive teamwork have replaced large offices.
One final reason for this lack of demand that was not mentioned in the article stems from a new trend where all employees, not matter their rank, are considered equals. For example, Cisco C.E.O. John Chambers works in a cubicle just like an intro analyst. Many believe this philosophy, leads to a better work environment and higher retention rates.
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