With so many businesses having to count every penny, some have decided to give up one of their biggest costs: office space. An Associated Press article states that more and more small businesses are shrinking staffs and encouraging telecommuting—-in order to be able to maintain small offices or eliminate the location altogether. According to article, not only are these businesses saving money on property leases, taxes, etc but also on auxiliary costs like utilities and office equipment.
Whether this trend has had any significant impact on the commercial real estate market is hard to say. Given the current climate of the market, businesses seeking smaller spaces and eliminating locations has probably help drive up the vacancy rate and reduce rents across the country. Vacancy rates in commercial properties have hit record highs in several major markets across the country and show no signs of decreasing. It begs the question whether the Federal government will step in as they have done with the residential market.
You can read the rest of the AP article here.