Office Leasing Terms Continue to be Shaped by Ongoing Waves of COVID-19

Although still in the early days of recovery, there have been numerous reports announcing signs of an office market rebound spreading optimism within the real estate industry as both “local and U.S. economies learn how to function amid the various waves of the pandemic.” To lure tenants back and help fuel recovery, landlords are offering large financial incentives such as lengthy free rent periods, build out costs, and moving expenses. Average cash payments to tenants in Manhattan in 2021 was $154 per square foot — almost double the $76 per square foot average in 2016; and as a result, “in 2021 landlords netted 7% less for office space than in prior years.”