After several years of contraction due to hybrid work, the office sector appears to be stabilizing and expanding as the nation’s 100 largest office users signed bigger leases last year. The average office lease among large office users increased to 288,834 square feet last year, up 8% from 2023, according to a report from CBRE.
The top 100 office leases of 2024 totaled 28.9 million square feet, up from 26.8 million square feet in 2023. Other than an isolated increase in 2021, the average office space has been on a downward trend since 2020, according to CBRE.
Overall U.S. office leasing showed a similar trend. The average size of a newly signed office lease increased to 29,774 square feet in 2024, after four years of declines, the report said.
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“The 100 largest office leases of 2024 underscore our view that more companies are done shrinking their office footprints to match new office attendance patterns,” said Whitley Collins, CBRE’s global president of occupier advisory and transaction services. “Some likely found they actually need more office space than they assumed and therefore must backtrack. Others are expanding their headcount as the economy gradually recovers.”
The tech industry led the rebound with 29 of the largest leases in 2024 totaling 9.3 million square feet, up from 11 in 2023 when it ranked third. The finance sector logged 15 of the biggest deals totaling 4.9 million square feet, and the business and professional services sector had 13 for 3.5 million square feet.
Education & health services and life sciences declined the most in terms of total square footage among the top 100, while government had the largest drop in number of leases, according to the report.
Tech increased overall office leasing, driven in part by the growth of artificial intelligence, and led all other sectors during the fourth quarter for activity across leases larger than 10,000 square feet.
Most mega leases were renewals – 68% last year versus 58% of the largest 100 leases in 2023. CBRE said the increase in renewals is likely due to cost and a slowdown in office construction that has limited large blocks of high-quality office space in some markets.
Manhattan led all markets for its share of the largest 100 leases than other regions. Washington D.C. followed with 16 of the 100 largest office leases, and Dallas-Fort Worth, Silicon Valley, Chicago and Boston rounded out the top six. Atlanta, San Francisco, Houston and Seattle were among the top 10.
Sixty percent of 2024’s top 100 leases were in prime, mixed-use or vibrant mixed-use districts, which collectively contain only 31% of total U.S. office inventory.
“Many occupiers are seeking amenity-rich and well-located office buildings to help achieve their office-attendance goals,” said CBRE.
Business-centric districts that lack prime office buildings and have fewer amenities captured 40% of the top 100 office leases despite containing 66% of the total U.S. office inventory. These districts are particularly attractive to tenants looking for less costly space or large suburban office campuses, the report said.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
