Vacant office space continued to accumulate in the second quarter, the latest indication that businesses aren’t planning significant hiring in the near future.
Office buildings across the U.S. lost 1.8 million square feet of occupied space in the quarter, pushing the national office vacancy rate to 17.4%, the highest level since 1993, according to New York-based research firm Inc.
While the drop in occupied space was much smaller than in previous quarters, analysts said companies” continued reduction of office space meant they still lacked confidence in economic recovery.
“The fate of office properties will depend largely on how well the U.S. economy and labor markets fare amid what appears to be a recovery that comes in fits and starts,” said Reis economist Ryan Severino.
Job growth and office-space use are closely intertwined. While some major users of offices, such as federal regulatory agencies, have been expanding, big banks and corporations have lagged behind in increasing their real-estate footprint, according to some analysts. That is a sign that these larger companies have been slow to return to their pre-recession staffing levels, a contributing factor to the persistently high U.S. unemployment rate …