Let’s pretend you’re the president of a medium- to large-sized company looking for office space. You read the newspaper and watch the financial channels, and it seems as though everyone, including the Fed, is saying our economy is humming along.
But on your search for office space, you make a discovery about empty office space all across America.
Here’s what you found. In San Francisco, 20.3% of the city’s office space sits vacant. In Denver, the vacancy rate is 22%. In Dallas, where you’ll also find the lowest office space rental rate in America, 26% of the city’s office space is vacant.
And it’s not just office space that’s empty either. In Tampa, 23.5% of the city’s retail space sits empty. The industrial market is not any better. Vacancy rates for industrial space in America sit at a 15-year high. In Boston, industrial rental rates have fallen 12%. In Austin, the same type of space has fallen in price by 20%.
What’s going on? For the industrial property market, the answer is simple. Manufacturing facilities and jobs are moving abroad where prices are cheaper.
While the optimists will tell us more people are working out of satellite offices from home, the truth of the matter is that even white-collar jobs have moved abroad to cheaper markets. It’s much cheaper for a large American company to house its call center in India as opposed to the U.S.
As for retail space, the big box stores have put a real dent into the old mom-and-pop operations. While many hope for the return of small retail, the numbers tell the story. Over one million people visit a Wal-Mart every week.
There’s a lot of rental space out there if a company is looking for it& and lots of potential staff to fill the space. Is it really any wonder why a cheaper U.S. dollar would be better for America?