Layoffs Help Tenants
Give Employees More Space

David Frohardt-Lane has more space to work in these days. Late last year, the San Francisco statistical analyst left behind a small office -- which he describes as "practically a closet" suitable for only one person -- that he shared with two co-workers at NextCard Inc., an Internet credit-card company on its last legs. In January, he started a new job at Wells Fargo & Co., where he has twice the amount of desk space in his cubicle, not to mention a filing cabinet and shelves. And a few departures from his department means he has even more room to spread out.

"It's a huge upgrade," says Mr. Frohardt-Lane, noting that unlike his previous workspace, his current one affords fewer distractions from nearby colleagues and enough space to look at data and documents at his desk.

Call it a small bright spot in the dreary workplace picture of the past couple of years: After years of watching their workspace shrink, cubicle dwellers are actually seeing a small rebound in the amount of elbow room they have. At the least, space isn't continuing to shrink.

During the past decade, many companies jammed more workers into less space in an effort to keep real-estate costs in check, exacerbated by the hiring boom and demand for space during the Internet craze. Companies provided about 219 square feet of office space to each worker at the beginning of this year, down about 15% from 1992, according to Torto Wheaton Research, a unit of real-estate services firm CB Richard Ellis Services Inc. By year end, Boston-based Torto Wheaton forecasts, office workers in the U.S. will have a little more room to spread out as the amount of space per worker inches up to 221 square feet. (In making the calculations, Torto Wheaton tracks all occupied office space, including common areas, so while the figures may show that space per worker is rising, it doesn't necessarily mean that each employee's workstation has expanded.)

Filling Vacancies

In large part, workers have the misfortune of their former colleagues to thank for any additional space. In many cities, the number of layoffs have outpaced the amount of office space companies have relinquished since many are locked into long-term leases. As evidence, consider that last year the amount of space per worker slowly crept higher in markets hard hit by the fall of the high-tech industry. Elsewhere, the amount of space per worker remained steady.

Companies are "inadvertently giving more space," says Jacque Ducharme, president of Julien J. Studley Inc., a New York real-estate brokerage firm that represents companies looking for space.

Adds Martha O'Mara, a lecturer at Harvard University's Graduate School of Design and author of "Strategy and Place," a book about how companies can best use their real estate: "Companies are finding they can't shrink as much as they thought because of the need for social or group-activity space. Before, the reason workers went to the office is because the secretary was there and there's access to phones and computers. For most people today, their infrastructure travels with them. Now, when people go to the office, they go there because other people are there."

Indeed, a few months ago, the 62 employees of the Institute of Food Technologists in Chicago traded their 21,000 square feet of space spread over two floors of an office building for 26,000 square feet on the 10th floor of a 17-story building. Each worker now gets a generous 419 square feet of space. The company "picked up 5,000 additional square feet with no appreciable increase in rent," says Dan Weber, the trade group's executive vice president.

Room to Grow

The amount of workspace per employee varies widely among cities. For instance, in Chicago -- despite the experience of the Institute of Food Technologists -- space comes out to an average 186 square feet per worker, though Torto Wheaton expects that figure to rise slightly this year to 188 square feet. Los Angeles and Silicon Valley also pack in their workers tightly at 187 and 162 square feet of per worker, respectively. This year, space per worker in Los Angeles is expected to contract slightly. In Silicon Valley the number is projected to rise by four square feet.

Atlanta offers up the most space at about 310 square feet of office space per worker, although Torto Wheaton predicts that figure will drop slightly to 307 square feet by year end. In Washington, D.C., it's 297 square feet per worker, and that market is expected to gain a few more square feet by year end. Dallas has 294 square feet, and workers will gain five square feet by year end.

In New York, there's 272 square feet of office space per worker, up from 260 immediately following the destruction of 13.4 million square feet of office space on Sept. 11. "Most investment banks have put their low-level workers out in New Jersey," says Ms. O'Mara. "The traders and investment bankers remain in Manhattan, and those are the more space-intensive users."

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