- The percentage of U.S. companies planning to reduce their office footprints dropped from 53% in 2023 to 37% in 2024.
- 38% of companies now anticipate growing their office space over the next three years, up from 20% last year.
- Nearly two-thirds of relocating companies are seeking better office locations, higher-quality buildings, and improved employee experiences.
The post-pandemic trend of shrinking office footprints appears to be reversing, with fewer companies now planning to reduce office space, according to CBRE’s 2024 Occupier Sentiment Survey.
Stabilizing Recovery
As reported in GlobeSt, the survey reveals that 38% of companies expect to expand their office space over the next three years, a significant jump from 20% a year earlier. Meanwhile, the percentage of companies anticipating reductions has dropped from 53% in 2023 to 37% in 2024.
Julie Whelan, CBRE’s global head of occupier research, notes that while high vacancy rates and rent troughs remain, there is a growing sense of optimism. “Assuming the economy stays on stable footing, [this] does signal… a recovery under way,” Whelan told GlobeSt.
Office Space Challenges
A significant 40% of surveyed companies reported challenges with insufficient office space, particularly on high-attendance days.
This problem is even more pronounced for companies that downsized too much or added post-pandemic staff. As a result, some companies are now rethinking their office space needs, leading to either office footprint stabilization or growth.
High Costs and Renewals
The high cost of moving and building out new office spaces is motivating many companies to stay in their current locations.
According to CBRE, 80% of respondents (and 92% of large occupiers) are exploring or executing lease renewals instead of relocating. Those who stay are leveraging favorable conditions to renegotiate their leases, with larger occupiers often finding greater success in securing favorable terms.
Focus on Quality, Sustainability
The flight-to-quality trend continues, with nearly two-thirds of companies relocating to better office locations, higher-quality buildings, or spaces that enhance employee experiences.
Prime office spaces now prioritize not just building quality, but also neighborhood amenities, which play a crucial role in creating an appealing employee experience that remote work cannot match.
Sustainability is increasingly becoming a priority for office occupiers. CBRE’s survey highlights the growing importance of “green lease clauses,” which include commitments to share data on energy, water, and waste, and to implement recycling systems.
A quarter of respondents said the presence or absence of these clauses would impact their real estate decisions.
Going Forward
As companies reassess their office space needs, a shift from contraction to stabilization and growth is becoming evident.
The focus on quality office environments and improved employee experiences, alongside sustainability considerations, is driving the next phase of the office real estate market.
