The Office Lease Comes Due
Five years after the great remote-work experiment, the leases signed before it are expiring — and the renewals reveal what companies actually decided.
Commercial property runs on long clocks. Office leases signed for ten or fifteen years in the mid-2010s are only now reaching expiry, which means the remote-work debate that began in 2020 is finally arriving at the moment that counts: the signature, or the refusal to sign.
The pattern emerging from renewals is more nuanced than either camp predicted. Few large companies have returned to five days a week for everyone, and few have abandoned the office entirely. The dominant outcome is a smaller, better, more expensive office. Firms are cutting total floor space — reductions of twenty to forty per cent are common — while spending more per square foot on what remains. The logic is straightforward: if the office's job is now collaboration and culture rather than daily attendance, it has to be a place people choose to travel to.
This has split the property market in two. New or thoroughly refurbished buildings with good ventilation, natural light and transit access are leasing well, sometimes above pre-2020 rents. Older stock — the anonymous towers of the 1970s and 80s — is in genuine distress, with vacancy rates that would have been unthinkable a decade ago. Some cities are converting the worst of it to housing; much of it simply sits, an overhang that will take years to clear.
For workers, the renewal wave settles an argument that surveys never could. Revealed preference shows most employers want two to three days of presence, most employees will tolerate two, and the compromise is holding. The fully remote company remains real but rare, and it is concentrated in specific sectors rather than spreading across the economy.
The limitations: lease data lags reality by design, and the renewals now being signed were negotiated under interest rates and labour markets that may not persist. Small companies, which lease flexibly and leave no paper trail, are invisible in this record. And the distress in older buildings is a slow-motion problem for city budgets that depend on commercial property taxes — a cost that will be socialised long after the leases themselves are forgotten.
What the renewals show, five years on, is that the office did not die. It shrank, upgraded and changed its job description — which is what technologies that survive disruption usually do.
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