Office leasing volume has moved decisively upward in the last several quarters, yet the character of the recovery is anything but conventional. Despite a nearly full rebound in the number of new lease transactions, the typical lease commitment has shrunk dramatically compared to the years leading up to the pandemic. Data from the most recent quarter shows total U.S. office leasing at around 100 million square feet—a number that remains shy of pre-pandemic averages—but with an unmistakable shift: “The number of deals getting done has fully recovered… but the average size of those is down, you know, 15 to 20%,” Phil Mobley, national director for office analytics at CoStar, tells GlobeSt.com.

Large Tenants Reshape Leasing Patterns

This reduction in the average lease size tells a more nuanced story than aggregate square footage alone. For several years, the most prominent driver was large corporate tenants making downward adjustments to their footprints as workplace strategies evolved. Many of these organizations, facing greater employee flexibility and reduced space needs, opted to renew or restructure leases at a smaller total footprint rather than expand or relocate. As a result, transactions that previously accounted for significant chunks of leased space—in the range of 100,000 square feet or more—have commonly contracted to the 75,000- to 80,000-square-foot range or below, as Mobley observed.

Smaller Tenants Take the Lead

But the dynamics did not stop there. In the aftermath of the period dominated by right-sizing among the largest occupiers, a shift unfolded. Many big organizations, especially in sectors like technology, have stabilized their headcounts or even downsized. Rather than seeking new space, they are now opting to stay put, effectively leaving the field open for a growing number of smaller tenants. This rise in smaller-space users in the leasing mix further downward pressures the average deal size.

Instant Insights /

Big Tenants, Small Leases: Changing Dynamics in Office Leasing

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