Jobs and Commercial Office Development: Do New Offices Generate New Jobs?

Abstract

Using original data for a Midwestern city, the dynamics of job generation through new office building construction are examined in this article. A limited number of new business openings were associated with the construction of four new office buildings, either new businesses located in the new buildings or new businesses located in the spaces vacated by existing businesses that moved into the new buildings. Most tenants who moved into the new office buildings had already been located in the central business district. There were, however, 1075 new jobs associated with the tenant moves into the four new buildings, with 17% of this total being derived from new businesses and 83% being related to the expansion of existing businesses. The new office space also enabled businesses to upgrade their images, move into more efficient quarters, and position themselves for future expansion.