Office space demand is shifting to short-term
We’ve noticed a growing trend toward short-term leases. It seems that more and more tenants are requesting one-year terms when three to five years used to be the norm. While the current economic uncertainty is certainly a factor, we believe there’s a larger societal shift at play.
We’re living in an age where on-demand services like Netflix, Airbnb, Amazon Prime, and Uber are programming us to think short-term. We’re becoming accustomed to the idea that we can have whatever we want, whenever we want it. This mindset is starting to spill over into our business decisions, and it’s not very compatible with the majority of the existing office leasing inventory. Most office space is designed, priced, and marketed for long-term commitments (5 or more years) and stable cash flow for landlords. Some owners are leaning into this emerging trend with move-in-ready suites, shorter terms, and simplified lease forms, but I think the demand for flexibility and a fast, streamlined leasing process is far outstripping supply.