"Employers planning for peak occupancy of their offices is one of the trends buoying the still-protracted recovery of the U.S. office market, according to Newmark executives The development turns on its head more dire predictions by analysts during the pandemic forecasting that tenants would only need half the amount of space they previously had if employees worked remotely for half of the week, Jess Morin, head of national occupier research for the commercial real estate services firm, told CFO Dive."
"Newmark's commercial real estate outlook report is forecasting continued stabilization of the office market in 2026, noting that over 70% of tenants now looking for office space are seeking to maintain or size up their footprint, with most tenants having already right-sized to hybrid work. Also helping strengthen the office market: reduced supply of new construction and demand for offices from AI-related companies."
Employers are planning for peak occupancy on Tuesdays and Wednesdays to ensure available desks and collaborative space when employees come into the office. The average leased space per office-using job has fallen only about 11% to roughly 122 square feet compared with 2019, far less than earlier 40% contraction forecasts. Over 70% of tenants now seeking office space aim to maintain or expand footprints after right-sizing for hybrid work. Reduced new-construction supply and demand from AI-related companies are strengthening market fundamentals. Approximately 1.4 billion square feet of leases expire between 2025 and 2027, enabling further footprint adjustments. Market stabilization is expected in 2026.
Read at www.cfodive.com
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