- Small businesses are an often-overlooked economic engine of the U.S. economy.
- Of the approximately 6.1 million private job openings in 1Q 2025, 47% were offered by firms with less than 50 employees.[1]
- Additionally, small firms with fewer than 50 employees employed about 44% of the nation’s private workforce.[2]
- Although leasing activity by small business often goes unnoticed in news headlines due to their relatively modest size, the cumulative impact on real estate demand is significant and far-reaching.
- CoStar data provides a general outline of the significance of small-business office leasing activity in 2024, whereby leases smaller than 5,000 square feet accounted for over 110,000 leases compared to the approximately 20,000 leases tallied for deals larger than 5,000 sq. ft.
- The high volume of small leases translates to a significant share of the total square footage leased.
- In our home market of Los Angeles, office leases under 5,000 square feet made up nearly 40% of the total square footage leased in the market during 2024.
- The same is true for smaller industrial spaces where leases under 15,000 square feet made up 35% of the square footage leased in 2024.
- While these examples highlight how small businesses play a vital role in real estate demand, they are also integral to the ownership and operation of the nation’s real estate. The health of small businesses is key to the performance of all the major property types, and to the national economy in whole.
[1] Bureau of Labor Statistics, JOLTS
[2] Bureau of Labor Statistics, Business Employment Dynamics
