Long-Term Leases, Demand for Flex Space Reemerge in Manhattan Market

The recovery of the average lease term length in the Manhattan office market is another welcome sign that conditions are normalizing as the Covid pandemic recedes.  Occupiers are shifting back to long-term leases as their space needs take shape and they look to take advantage of the tenant-favorable market conditions, which include high availability rates, reduced rents and historically high concession packages. Simultaneously with the return of long-term leases, a new “core plus flex” model is emerging, where occupiers make long-term lease commitments while also taking on flex space to accommodate the more fluid and/or less predictable part of their business operation.