Average Lease Size
The average size of office and industrial leases signed in the first half of 2010 continued to shrink, ending the period at 9,333 square feet for office leases and 23,657 square feet for industrial leases. This indicates that tenants, although they are no longer frozen in place by the Great Recession, are exercising caution with their space requirements. Specifically, the smaller average lease sizes suggest one or more of the following situations: that tenants are not planning for future growth; that tenants are reducing their space needs after laying off employees during the recession; or that tenants, even if they didn’t implement layoffs, are using techniques to reduce their average space per employee and thus their occupancy costs. Office and industrial lease terms also drifted lower in the first half of 2010, another sign that tenants are taking a conservative approach to their space needs.