Good news for Knoxville and Interesting Office Developments

Its one of those good news, bad news things...

Good: Knoxville will be home  to the strongest job market in the country this spring, according to a national survey released by Manpower Inc.  Twenty-five percent of the Knoxville employers surveyed said they would add jobs in the April through June period.

Manpower surveyed more than 18,000 employers in the 100 largest metro markets.

Bad:  Tenants are squeezing employees in tighter than ever before. 

According to the Wall Street Journal, the "Corporate Cram" is single-handedly putting a hiccup in the office recovery.

Companies looking for cost savings are increasingly packing more employees into less space, a trend that is helping cause U.S. vacancy rates to linger at high levels even as employers add jobs in the slowly expanding economy.

Panasonic Corp., for example, is planning to move into a new 280,000-square-foot U.S. headquarters in Newark, N.J., next year. But it is taking significantly less than the approximately 575,000 square feet of office and labs at its current campus in Secaucus, N.J.  The electronics company says it isn't reducing its head count, but is simply reconfiguring its offices.

Employers gradually have been taking up less space for decades, but real-estate professionals say the drive to use less space has picked up since the economic downturn, as companies look to trim costs where they can across their budgets. 

Workstations are shrinking and private offices are disappearing, replaced by cubicles with low walls, and more employees are working remotely.  Companies today are taking space with an average of about 200 square feet per employee, down about 20% from a decade ago.  

Office landlords have been encouraged lately by news of job growth. They also are hoping that the dearth of new construction will give the market a boost.To be sure, not all companies are overhauling their space. Many tenants simply renew their leases when they come due, which makes it harder to rethink their approach to workspace than if they were moving to a different building.

But some industries are both contracting and using less space per employee. For example, many companies in the financial-services sector—a traditional driver of the office-space market—have been laying off workers and looking for more-efficient workspace.

Just when you think things are getting better...