Along with numerous other internet based industries in the US, the online office rental market is growing from strength to strength, moving further and further away from traditional bricks-and-mortar office realtors.
Complementary trends have driven this spectacular growth in the online office rental industry: First, the majority of start-up companies in search of new office space come from the tech sector, where use of the internet is more reflex than a matter of conscious choice. Companies that make and market consumer electronics naturally will shop the virtual world rather than contacting an agent or hitting the streets. Second, the majority of business and job growth has taken place in tech-rich cities like Pittsburgh, Austin, and San Jose where both brokers and prospective tenants have established sophisticated, high-visibility internet profiles and therefore are likely to find one another via LinkedIn or other professional networks. While the nationwide urban office vacancy rate hovered between 15% and 18%, it fell below 13% in tech-rich markets where agents capitalized on their web tools to generate leads and close deals.
Although the office rental market is showing the same signs of recovery experts see in all real estate sectors, nevertheless it remains seriously depressed. Especially suburban and "edge city" markets are struggling, some major metropolitan areas groaning under vacancy rates above 20%. Exacerbating the problem, many of these properties are brand new, and some are "upside-down" in their financing. Their owners and managers naturally feel strong sense of urgency about filling them to capacity, but they have lowered rents and offered "teaser" details to the point where they can stretch no further. Therefore, they have intensified their internet marketing initiatives, driving traffic to their websites when it does not pass their brick-and-mortar sites.
Large numbers of web-based businessmen and women go to the web to find products and services they need, and web-savvy property managers will change not only the medium but also the content of their advertising, showcasing the tech-friendly features on their properties. According to a preliminary study by The Industry Standard, an agent listing an office already hard-wired for broadband internet access is at least ten times more likely to find tenants online than in print.
Cost-conscious new businesses especially use their internet tools to locate and rent new office space, because the internet search process is considerably more efficient than old-fashioned telephone or "gumshoe" methods. Residential real estate agents were first to note and document increased efficiency among shoppers who used the internet before doing business face-to-face. CBRE recently reported online property searchers typically toured three houses as opposed to traditional searchers touring ten; and internet shoppers closed their deals approximately twice as fast as shoppers who relied exclusively on their agents. According to CBRE, similar patterns apply to online rental office seekers. As they have toured the virtual world, these web-savvy would-be tenants typically have drilled down on the details, found spaces they want, and are eager to close their deals.
Property owners and managers are advised to build their web presence in order to keep up with current online office rental trends as the internet market continues to grow. Today, along with many other industries, online searches are the first port of call for the vast majority of businesses looking to rent office space.