Could There Be an Office Shortage? What’s Happening and Why It Matters

For the first time since the pandemic, some U.S. office markets are at risk of running out of space. After five years of aggressive downsizing, record inventory removals, and shifting workplace policies, a surprising reversal is emerging: supply constraints are beginning to take hold in high-demand areas.

Office Tenants Cut Space, But Headcounts Keep Growing

Since the onset of the pandemic:

Office tenants have collectively reduced their footprints by 7.8%

Yet total office-using employment has grown by more than 5%

This divergence—driven by hybrid work, space efficiency measures, and economic defensiveness—allowed companies to cut costs without immediately feeling the squeeze on space needs. They're beginning to feel it now, and they're going to be feeling it more...

A Shift in Attendance Policies Is Creating New Demand

Many firms that reduced space may soon find themselves with not enough room to accommodate employees. Several of the largest U.S. occupiers—including Amazon, JP Morgan, and the U.S. government—are shifting to five-day office attendance policies. Amazon alone executed 500,000+ square feet of expansion leases in late 2024 to meet rising in-office demand.

High-Demand Areas Are Already Seeing Supply Shortages

In New York, new office supply is less than 10% vacant

In Hudson Yards, less than 1% of space remains available for lease

With major companies like WPP, Southwest Airlines, Dell, Nissan, and Toyota all increasing space requirements recently—and more firms likely to follow—competition for quality office space could tighten significantly in the coming years.

The Market Is Facing a Net Negative Inventory Trend

New supply remains at historic lows

More space is being removed from inventory than added

This net negative inventory environment means that the long-standing office space surplus is shrinking—and in some markets, disappearing altogether.

What Happens Next?

As office attendance policies evolve and companies recognize the need for long-term flexibility, firms that delayed space decisions may soon find themselves facing limited availability and rising costs.

For those planning future office strategies, waiting too long could mean fewer options and higher costs. Companies delaying decisions may find themselves at a competitive disadvantage, struggling to attract top talent and secure premium office locations as availability tightens and demand surges.

These, among multiple others represented by Gregg Metcalf and team, reflect a broader trend of large firms consolidating operations and expanding their footprints in the Atlanta market.

AIG's 178,666-square-foot lease at 2002 Summit Boulevard

represented by Gregg Metcalf and team

Deloitte's 115,000-square-foot lease at Promenade Tower
represented by Gregg Metcalf and team.

How to Stay Ahead

Conduct a Needs Analysis to align your real estate strategy with your business objectives.

Secure and Optimize Office Location(s), Space(s), and Lease(s).

Maximize Profitability, Recruitment, and Retention

In markets where premium office space is becoming scarce and competition fierce, having the right strategy can mean the difference between securing the ideal office space (design, lease, and location) and settling for less, which can be costly.

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

mobile: 404.661.9284