Economic uncertainty is impacting decisions around space needs, and leasing activity has been increasingly dominated by smaller space commitments since the pandemic.
About 60% of leases signed in 2022 were for less than 15,000 square feet, a share that has increased from 49% prior to the pandemic.
On the other end of the size spectrum, the share of commitments in large leases has declined considerably. Just 10% of leases signed in 2022 were for 100,000 square feet or more, down from nearly 19% on average from 2017 to 2019.
CoStar expects that smaller leases will prevail in 2023 as companies continue to reassess space needs because of the effects of remote working and other factors, which signals slower demand growth.