U.S. companies are renting new office space at a rapid clip, finally booking floors and filling suites that sat empty or underused after the Great Recession of the late 2000s. That trend echoes similar surges in major cities around the globe, and it has inspired developers and entrepreneurs to devise creative solutions to meet demand.
In the U.S., employers are renting new office space at the fastest rate since the downturn, reports the Wall Street Journal based on data provided by the real estate research service Reis Inc. In 2015, they reserved 42.4 million square feet of extra office space, which is up from 31.4 million the year before. A spike in the fourth quarter of 2015 represented the industry's fastest growth since 2007.
While that overall growth was driven by a feverish need in tech-heavy locations such as Silicon Valley and Seattle, those coastal enclaves are not the only places where it was observed. In downtown Chicago, vacancy rates dropped to a seven-year low in the final quarter of 2015 to just 12 percent, reports Crain’s Chicago Business. But if Chicago feels crowded — the vacancy rate in downtown Ann Arbor, Michigan, slid to a mere 2.1 percent. One real estate expert who has worked in the area since 1985 told Michigan Live that he's never seen the market so tight.
Heavily populated cities around the world are also watching firms clamor for new office space. In Bangkok, Thailand, experts say demand has risen faster than new offices can be built. The city faces a 93.5 percent occupancy rate as a result, reports Bangkok Post. Across seven major cities in India, e-commerce companies and startups have driven a 17 percent increase in demand for office space, according to The Economic Times.
This fervor is inspiring entrepreneurs to dream up creative solutions to provide office space to employers. A startup called Breather rents private meeting and break rooms throughout major cities including San Francisco and New York on a per hour basis as a temporary solution for employees who wish to escape the din of a crowded workspace. Property developers in India are watching demand for compact office space grow and have started to divide new buildings into more units to satisfy it.