{"id":1004750048,"date":"2025-03-10T04:55:44","date_gmt":"2025-03-10T12:55:44","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004750048"},"modified":"2025-03-11T06:24:56","modified_gmt":"2025-03-11T14:24:56","slug":"office-owners-scale-back-concessions","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/","title":{"rendered":"Office Owners Scale Back Concessions"},"content":{"rendered":"\n

Office lease incentives dropped last year for the first time since CBRE began tracking this metric in 2019. The firm’s latest report also shows that Class A+\/A office building rents and those in Class B and C continue to go in opposite directions.<\/p>\n\n\n\n

For top tier assets, base and effective rents are up by 3.1 percent and 5.2 percent, respectively, since 2023. Base and effective rents for Class B\/C office buildings have dropped by 5.7 percent and 1.2 percent.<\/p>\n\n\n\n

\"Table<\/a>
Office-lease concessions in recent years, calculated from CBRE’s analysis of 4,350 leases. Table courtesy of CBRE Research<\/em><\/figcaption><\/figure>\n\n\n\n

CBRE analyzed 4,350 new lease comparables across the Atlanta, Boston, Chicago, Dallas-Fort Worth, Denver, Houston, Los Angeles, Manhattan, Philadelphia, San Francisco, Seattle and Washington, D.C., markets.<\/p>\n\n\n\n

\n\n\n\n

READ ALSO<\/strong>: Net Effective Office Costs Edge Up<\/a><\/p>\n\n\n\n

\n\n\n\n

Top-quality, amenity-laden office buildings in prime locations are in limited supply and high demand. The report showed a growing rent base and fewer concessions for these properties\u2019 tenants last year. Incentives include rent-free months and landlord-funded office space improvements. <\/p>\n\n\n\n

\u201cWe expect those owners of prime buildings to continue to dial back concessions over the next 24 months, especially given the dwindling supply of premium office space coupled with a lack of new construction,\u201d Mike Watts, CBRE president of Americas investor leasing, told Commercial Property Executive<\/em>.<\/p>\n\n\n\n

\"Chart<\/a>
Annual office base rent growth by building class. Chart courtesy of CBRE Research, Q4 2024<\/em><\/figcaption><\/figure>\n\n\n\n

Top-tier buildings are commanding a premium, especially given that landlords are offering tenant-improvement allowances to accommodate high-quality fit-outs.<\/p>\n\n\n\n

\"Chart<\/a>
Annual office effective rent growth by building class. Chart courtesy of CBRE Research, Q4 2024<\/em><\/figcaption><\/figure>\n\n\n\n

A bifurcated office market<\/h2>\n\n\n\n

Meanwhile, effective rents for lower-tier office buildings are slipping steadily. CBRE showed that landlords kept base rents relatively flat until the second half of 2024. At that point, financing requirements came into play in order to maintain property values.<\/p>\n\n\n\n

Landlord concession packages topped out in 2023; however, they are still greater than in 2019.<\/p>\n\n\n\n

For the lower-tiered offices, the tenants have the upper hand, given the high volume of available assets. Conversely, owners of the highest-quality buildings in the most sought-after locations are in great bargaining shape, given the flight-to-quality trend and diminishing new supply.<\/p>\n\n\n\n

\"Chart<\/a>
Average tenant improvement allowance & free rent. Chart courtesy of CBRE Research, Q4 2024<\/em><\/figcaption><\/figure>\n\n\n\n

Last month, CommercialEdge reported that office prices have retreated and discounts are plentiful. The average price fell 11 percent year-over-year due to uncertainty and the continued domination of remote and hybrid work schedules, according to its February report<\/a>.<\/p>\n\n\n\n

In 2023, prices fell by 24 percent and since 2019, office values have dropped by 37 percent.<\/p>\n","protected":false},"excerpt":{"rendered":"

And how this trend is expected to play out, according to CBRE\u2019s latest research.<\/p>\n","protected":false},"author":3568,"featured_media":1004750098,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,23891,21742,21747,21785,51037],"tags":[32789],"class_list":["post-1004750048","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-national","category-latest","category-office","category-property-management","category-trends","tag-cbre"],"acf":[],"yoast_head":"\nOffice Owners Scale Back Concessions - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Class A+\/A office building rents and those in Class B and C continue to go in opposite directions, according to a new report from CBRE.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Office Owners Scale Back Concessions\" \/>\n<meta property=\"og:description\" content=\"Class A+\/A office building rents and those in Class B and C continue to go in opposite directions, according to a new report from CBRE.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2025-03-10T12:55:44+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-03-11T14:24:56+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/03\/cbre-chart-office-rents.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"882\" \/>\n\t<meta property=\"og:image:height\" content=\"662\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Richard Berger\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/\",\"name\":\"Office Owners Scale Back Concessions - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/03\/cbre-chart-office-rents.jpg\",\"datePublished\":\"2025-03-10T12:55:44+00:00\",\"dateModified\":\"2025-03-11T14:24:56+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/6d4c5f1b2f682b3604ad9fe73c19fed7\"},\"description\":\"Class A+\/A office building rents and those in Class B and C continue to go in opposite directions, according to a new report from CBRE.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/03\/cbre-chart-office-rents.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/03\/cbre-chart-office-rents.jpg\",\"width\":882,\"height\":662,\"caption\":\"Annual office base rent growth by building class. Chart courtesy of CBRE Research, Q4 2024\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.commercialsearch.com\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Office Owners Scale Back Concessions\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/6d4c5f1b2f682b3604ad9fe73c19fed7\",\"name\":\"Richard Berger\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/bf9a97027a74b606d01db57720228242e692d3db9d827930b02ed8baaf3623a4?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/bf9a97027a74b606d01db57720228242e692d3db9d827930b02ed8baaf3623a4?s=96&d=mm&r=g\",\"caption\":\"Richard Berger\"},\"description\":\"Richard Berger has 20+ years of experience covering commercial real estate for various media sites and CRE-related associations. He lives in Northern Virginia.\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/author\/richardberger\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Office Owners Scale Back Concessions - Commercial Property Executive","description":"Class A+\/A office building rents and those in Class B and C continue to go in opposite directions, according to a new report from CBRE.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/","og_locale":"en_US","og_type":"article","og_title":"Office Owners Scale Back Concessions","og_description":"Class A+\/A office building rents and those in Class B and C continue to go in opposite directions, according to a new report from CBRE.","og_url":"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2025-03-10T12:55:44+00:00","article_modified_time":"2025-03-11T14:24:56+00:00","og_image":[{"width":882,"height":662,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/03\/cbre-chart-office-rents.jpg","type":"image\/jpeg"}],"author":"Richard Berger","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/","url":"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/","name":"Office Owners Scale Back Concessions - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/03\/cbre-chart-office-rents.jpg","datePublished":"2025-03-10T12:55:44+00:00","dateModified":"2025-03-11T14:24:56+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/6d4c5f1b2f682b3604ad9fe73c19fed7"},"description":"Class A+\/A office building rents and those in Class B and C continue to go in opposite directions, according to a new report from CBRE.","breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/03\/cbre-chart-office-rents.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/03\/cbre-chart-office-rents.jpg","width":882,"height":662,"caption":"Annual office base rent growth by building class. Chart courtesy of CBRE Research, Q4 2024"},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/office-owners-scale-back-concessions\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"Office Owners Scale Back Concessions"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/6d4c5f1b2f682b3604ad9fe73c19fed7","name":"Richard Berger","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/bf9a97027a74b606d01db57720228242e692d3db9d827930b02ed8baaf3623a4?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/bf9a97027a74b606d01db57720228242e692d3db9d827930b02ed8baaf3623a4?s=96&d=mm&r=g","caption":"Richard Berger"},"description":"Richard Berger has 20+ years of experience covering commercial real estate for various media sites and CRE-related associations. He lives in Northern Virginia.","url":"https:\/\/www.commercialsearch.com\/news\/author\/richardberger\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/03\/cbre-chart-office-rents.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004750048","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/3568"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004750048"}],"version-history":[{"count":6,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004750048\/revisions"}],"predecessor-version":[{"id":1004750167,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004750048\/revisions\/1004750167"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004750098"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004750048"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004750048"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004750048"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}