There been an emerging trend in the office leasing market today that has now established itself as a permanent fact of life: tenants are doing more with less space.  The average rentable square footage per employee has been shrinking, from an average of 250 square feet per employee to around 200 square feet.  This is due to three primary factors: the trend away from private offices dedicated to a single employee, the evolution toward the paperless office, and the constant improvement of technology that enables workers to be productive outside of the office.  Put another way, the building footprint of each employee is shrinking...and there are fewer feet in the office on any given day.

This is, to a significant degree what has been afflicting the downtown Los Angeles market which continues to struggle with a vacancy rate north of 20%.  The large corporate tenants that gravitate to downtown such as banks and big law firms have seen the greatest contraction on space used per employee. 

One big question that this trend poses for landlords is how do they park 5 cars per 1,000 square feet in a parking structure that has the capacity for 4 cars per 1,000 square feet?  Ultimately, this problem might be thrust back to the tenant - the landlord could balk at a plan that shows the premises being overloaded with employees.  But promising news may be on the horizon:  the City of Los Angeles is completely recasting the zoning code and has begun to reverse its emphasis on providing an abundance of off-street parking.  Traffic congestion, they have begun to reason, is better served by constructing less parking, thereby encouraging people to use public transportation for their commute to work. 

A good broker will remain aware of these dynamics as he helps you find the right location for your business.