Are Office Leases Really Getting Shorter?

Abstract

"Long leases" usually refers to a lease contract that spans the 5-10 year range, not 25. "Brokers make more money with long-term leases." Even Michael Lirtzman, Head of U.S. Office Agency Leasing at Colliers, almost never sees leases longer than 20 years. Reports of these shrinking leases are on the rise as indecisive operators temporarily extend their leases as they try to calculate how they should handle their office footprint. With more lease expirations around the corner and one-year renewals becoming the norm, commercial office leases in the Seattle-area have dropped to an average lease length of 58 months, seven months less than the beginning of 2020. Even though a medley of companies across the U.S. are demanding leases as short as one year, JLL's Q2 US Office Outlook says that nearly half of all deal volume for offices in the U.S. is 10 years or more. While we're certainly not seeing any leases as long as Condé Nast's being signed, deals for the textbook "Long" lease are still happening fairly often. One-year leases could persist in the short-term, as companies figure out how to pivot to hybrid work schedules or hub-and-spoke models, but longer leases are still driving deals.