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Shadow Office Space Inhibiting the Office Market Recovery

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According to their 2011 U.S. Macro Forecast report by Cassidy Turley from the WSJ, Shadow office space has been affecting the office space for lease recovery already.

In the article, "The U.S. office sector needs to absorb 126 million square feet of empty space to return to pre-recession vacancy levels, the forecast says. The number of “office-using jobs” created last year should have resulted in 53.1 million square feet of office absorption for 2010. But, because of shadow space, only 18 million square feet of space was absorbed for the year.

But the report says the drag of shadow space will be less severe this year, and vacancy rate will move down (it was 16.7% in the fourth quarter). Still, vacancy won’t reach pre-recession levels — between 12.5% and 13% — before 2014. And rents will remain where they are now for another two years."

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