Companies might be past the peak of their office downsizing, according to CBRE, the world’s largest commercial real estate services and investment firm.
CBRE released results from a survey of 225 companies with offices in the U.S., Canada and Latin America.
Fewer companies are planning to shrink their office space this year compared with last year — down to 37% from 53%.
The survey also found more companies plan to expand their office space over the next several years. That share increased to 38% from 20% a year ago.
Some companies may have trimmed too much space in recent years, CBRE said.
“An 18-percentage-point, year-over-year increase in companies anticipating expansion of their office footprints is a significant step toward a return to growth,” Manish Kashyap, CBRE global president of advisory and transaction services, said in a news release. “It bodes well for the U.S. office market, which has faced many challenges in recent years. There remains a segment of the demand where companies are opting to renew their leases to forego the costs of moving, but there is now a change in sentiment favoring expansion.”
This appears to be a reversal after the pandemic-era contractions and shifts toward remote and hybrid work.
CBRE said the high costs of moving and building out new space are still limiting factors for companies looking to expand.
Most companies are relocating because they want upgraded space, such as a better location, better quality space or improved employee experience, according to CBRE.
Most companies report office attendance is at a steady state, up modestly from 60% in 2023 and 43% in 2022.
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