Office space has historically reflected the health of the American economy, but new construction hasn’t recovered to pre-2008 levels. That has Joel Kotkin wondering: have we hit “peak office” in America? Kotkin writes for Forbes:
[T]he trend in real estate remains to convert office spaces to other uses, particularly residential. Large-scale office construction is happening in just a handful of markets; New York and Houston are the only ones with 10 million square feet being built, with smaller amounts in the works in Boston, Washington, Dallas-Ft. Worth and the San Francisco Bay Area.
What explains this slow-down in office construction? Kotkin suggests that the nature of America’s recent economic recovery, in which many of the jobs added were low-wage and part-time, lowered demand for office space. But he goes on to identify a more convincing explanation—telework:
Working at home is growing far faster than commuting by either car or transit, and in most U.S. metro areas, far exceeds those who get to work by public conveyance, most often to downtown areas. Over the past decade the number of U.S. telecommuters expanded 41% to some 1.7 million, almost double the much-ballyhooed increase of 900,000 transit riders.
This reflects a major change in the way the economy works, and it’s something we can expect more of in the near future. Growth will come with fewer office towers, fewer highway expansions, and fewer commutes as we transition from an industrial economy to one built on the manipulation of information.[Telecommuting image courtesy of Shutterstock]