Why Office Leases Are Getting Shorter And What That Means For Valuations

By Jon Banister

Tenant demand in the office market has been increasingly favoring shorter-term lease deals, a trend that complicates how much buildings are worth.

This shift has created more flexibility for tenants who don't want to be locked into a long-term lease, and it has helped landlords fill spaces in their buildings that may otherwise sit vacant.

Despite the move toward shorter-term leases, office buildings still achieve higher valuations when they have the stability of long-term leases, and landlords have had to work to make lenders and investors more comfortable with the flexible deals their tenants crave.

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