Flexibility is a Valuable Commodity.
As office-occupying companies vacillate between edicts of returning to the office and work-from-home models, organizations are taking a measured approach. While overall lease rates have remained flat, concessions and robust TI packages are lowering the nominal rent. The market will likely begin to soften further as more pre-pandemic signed leases begin to roll. Some US markets, particularly Sun-Belt and highly-diversified industry markets, have fared better than others. Many occupiers are hesitant to sign long-term leases, pausing to better understand the economic landscape and long-term employee working strategies.
Office Occupier View:
- Newer, well-amenitized buildings are still in demand as occupiers are willing to pay more on a per square foot basis for a space that will incentivize employees to return-to-the-office.
- Tenants in the market are finding longer times to find spaces as they navigate the financial health of buildings and landlords.
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