Office space landlords in some downtown United States cities are struggling to adapt to a continuing decline in demand for ‘traditional’ office space.
‘Traditional’ work spaces, with long-term leases and inflexible terms have become something of a relic, as far as demand goes. Those who follow trends in commercial real estate will be very aware of the increasing need for a greater level of flexibility.
Louisville office space broker Gant Hill, of Gant Hill & Associates LLC, believes the biggest challenge facing the urban office market is the lack of “quality occupants” willing to lease spaces in the city’s central business district.
“The trent has been…of traditional office dwellers opting or a different type of space that is more open, more flexible with regards to rates and terms,” he said.
“They’re opting out of the traditional office space that they might have been attracted to 20 years ago. There is less need for large offices. There is less need for administrative space.”
“There’s more interest in interactive space and more mobile space,” he added. “A lot of our building stock does not currently accommodate that changing demand.”
This change in desired office space terms is believed to be due to the changing practices of businesses seeking space. Creative, technology, architecture and marketing businesses are demanding an increasing amount of space – many of which require flexible terms.