The slowdown comes as high inflation and rising interest rates have started taking their toll on the economy. Compounding the situation, office leasing also hasn’t rebounded fully from work-from-home arrangements that became the norm at the height of the pandemic.
The number of new office leases signed in the third quarter was the lowest in six quarters. Deal activity was 18% lower than in the same quarter a year ago and 15% lower than in the third quarter of 2019.
The total amount of office space leased in the third quarter was the lowest in five quarters. Volume was 16% lower than a year ago and 27% lower than in the third quarter of 2019.
Notable too is that the average size of each new lease has flattened out over the past three quarters. The average leased signed this year has been 3,827 square feet. That is down 16% from the average of 4,539 square feet in the same time frame in 2019. Year over year, the average size of leases signed is down 14% from 2019.