Disconnect Emerges Between Office Job Growth & Office Demand

Although U.S. office-using employment has steadily increased during eight of the past 10 quarters and is 5.4% above pre-pandemic levels, occupied office space has remained relatively stagnant. Office demand has been most impacted by hybrid work arrangements, as well as corporate cost containment and economic uncertainty caused by rapidly rising interest rates. Despite more office-using jobs today, occupied office space is 3.5% below pre-pandemic levels and space allocated for each employee has sunk to a 22-year low of 152 sq. ft.

Historically, increases in office-using employment led to more demand for office space, in which most employees worked exclusively. Sixty-one percent work in the office only part time and 5% are fully remote, according to CBRE’s Global Live Work Shop Report.

Figure 1 illustrates how office-using employment (light green) and occupied space (dark green) began to diverge in early 2021. While this divergence likely will narrow or reverse over time, it has become less clear how much that office-using employment growth will influence office demand in the future.

Figure 1: Office-Using Employment & Occupied Office Space

Source: U.S. Bureau of Labor Statistics, CBRE Econometric Advisors, Q4 2022.

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