Despite a relatively strong economy, landlords continue to offer free rent in order to secure long-term office deals.
On average, owners of office space nationwide agreed to 12.5 months of free leasing on deals signed during the first quarter of 2021, a 29 percent increase year-over-year, according to CBRE.
Tenant-improvement allowances – money that landlords provide tenants to upgrade the outside of their office buildings – stayed at an average of roughly $70 to $75 per sq. ft.
All of the above numbers are for new leases of at least 10 years.
Because of the economic uncertainty caused by the pandemic, companies in need of office space have had the edge over office landlords during lease negotiations.
“Companies seeking long-term leases will find that asking rents haven’t come down much, but overall concessions have increased,” said Whitley Collins, CBRE’s global president of advisory and transaction services, in the statement. “Those willing to get out in front of the full economic recovery can expect most landlords to be very accommodating.”