CFO Magazine has cited one of CoreNet Global’s surveys in a report on how remote work and other factors are leading corporate real estate managers at large companies are triggering cost-cutting measures including reductions of office space. (photo credit: CFO Magazine/Getty)
“Some companies have shrunk their real estate footprints to reflect a need for fewer or smaller offices. More employees working remotely sparked the early wave of that. But now, that’s not the only reason organizations are abandoning spaces. Macroeconomic forces, including inflation, have nudged reluctant management teams into making decisions on office space reductions,” the magazine reported.
More than half (54%) of respondents to a worldwide CoreNet Global survey of corporate real estate decision-makers released in September plan to consolidate office locations and 42% are reducing the size of leases they are signing.
The U.S. office vacancy rate stood at 15.4% at the end of the third quarter, an increase of 10 basis points from the second quarter, according to real estate adviser Colliers on September 30. However, vacancy is still “comfortably below” the record peak of 16.3% at the height of the global financial crisis, the firm’s third-quarter outlook said.