U.S. Office Availability Rate Declines for First Time in Five Years

The U.S. office market reached an important milestone in Q3, with concurrent acceleration in leasing activity and a slowdown in new supply leading to a decline in availability levels for the first time in over five years.

After years of elevated vacancy rates, the U.S. office market saw a pivotal shift in the third quarter of this year. This change is fueled by two primary factors:

• Increase in Leasing Activity: Leasing momentum has continued to build since reaching a post-pandemic high last quarter.

  

  Source: JLL Research
  

• Reduction in New Office Supply: Instead of adding more square footage, developers and property owners are focusing on conversions and redevelopments to meet the demands of the evolving market. A record volume of inventory is being repurposed, creating a more balanced supply and demand environment.

  

  Source: JLL Research

  
  

The result? A nationally tightening office market, a trend we haven’t seen since 2019.

What It Means for Recruitment, Retention, & Profitability

This shift in availability has meaningful implications for companies in their efforts to attract top talent, retain valuable employees, and maintain profitability.

• Recruitment:

  • Tighter office market drives up competition for prime locations, particularly in urban areas that attract high-level talent.

  • Well-located, appealing office spaces offer a strategic advantage in recruiting top candidates.

  • Prospective employees are increasingly drawn to workspaces that align with their lifestyle and professional preferences.

    
    

• Retention:

  • Comfortable and well-positioned office spaces are critical to fostering a positive company culture.

  • Thoughtfully designed office environments improve employee satisfaction and contribute to higher retention rates.

  • Employees often view a welcoming workspace as a positive extension of the company’s values, reducing turnover and strengthening team cohesion.

  
  

• Profitability:

  • Declining supply means office spaces in desirable areas may command higher lease rates, making it beneficial for companies to lock in favorable terms now.

  • Companies with optimized footprints in prime locations can enhance their financial position by leveraging the limited supply.

  
  

Example: Deloitte's Strategic Move in Midtown Atlanta

Working with Deloitte in a rapidly shifting market, we successfully eliminated 240,000 sf excess, inefficient square footage, and we secured 92,000 SF at Promenade Tower in Midtown. We negotiated terms specifically for Deloitte's for flexibility and future growth.

Just seven months later, we added another 23,000 SF under the same advantageous terms, optimizing Deloitte’s footprint in a tightening market.

 This move not only cut costs but also supported recruitment, retention, and strategic planning, illustrating the long-term value of timely office strategy adjustments.

 It’s Never Too Early or Too Late to Review Your Strategy

With availability rates dropping and demand rising, companies have a unique opportunity to view their office footprint as a strategic asset for recruitment, retention, and profitability. The tightening U.S. office market signals more than just a trend; it’s an invitation for companies to adapt and potentially achieve significant gains in both workforce and bottom line.

Click here to explore Deloitte's and more case studies/ success stories. 

Take the Next Step

Many companies lose millions of dollars due to lack of employee engagement, loss of top talent, and inefficient or unneeded office space.

Working with me, clients gain the insights, the analysis, and the plan to obtain the lease and office space that retains the best employees, attracts top talent, and maximizes profitability.

To Contact Gregg Metcalf: email: gregg.metcalf@jll.com

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