The average amount of free rent that office landlords are offering to secure long-term leases jumped 12.5 months in the first quarter. That was a 29% increase from a year earlier, according to CBRE.
Free rent has risen sharply since 2019. From Q1 to Q3 2019, free rent fell from 9.5 to 8.5 months before jumping back to 9.5 months by the end of the year, according to CBRE. From Q4 2019 to Q4 2020, free jumped from 9.5 months to almost 11 months. Then it rose more than 1.5 months in Q1 2021.
While free rent has increased, tenant-improvement allowances have stayed steady for newly signed leases of at least 10 years in term. CBRE reports that tenant improvement allowances have held constant at an average of roughly $70 to $75 per square foot.
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Leslie Shaver
Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.
