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Why market timing and strategic advisory matter more than ever in retail and office lease management
As we reach the mid-point of 2025, retail and office leasing is experiencing a pivotal reset. The aftermath of pandemic-era disruption, the normalization of hybrid work flexibility, evolving consumer behaviors, and economic uncertainty impacted by on-again, off-again tariffs, have left a complex, yet opportunity-rich environment. For tenant rep leaders and corporate lease administrators, the question is not just what space to lease but when and how.
Timing, as always, is everything. And in today’s climate, it can also be the difference between overcommitting to yesterday’s lease standards or securing terms that futureproof your portfolio.
Retail vs. Office: Two Diverging Stories
Retail leasing in 2025 is gaining momentum, particularly in well-performing suburban nodes and mixed-use urban districts. Experiential brands and direct-to-consumer (DTC) upstarts are capitalizing on vacancies to test physical formats. At the same time, traditional retailers are reassessing footprints, trimming exposure in underperforming centers while continuing to invest in higher-performing flagship, community, and A-level mall locations where demand remains at all-time highs.
By contrast, office leases remain in a state of flux. While Class A assets in prime locations have seen some rebound, secondary office space continues to struggle. Hybrid work is no longer a trend; it’s a norm. This is pushing tenants to demand more flexibility, wellness infrastructure, and technology integration in exchange for any long-term commitments.
For lease managers overseeing multi-format portfolios or both categories, the divergence means a need for tailored strategies and precise timing.
Vacancy Rates: A Window of Opportunity?
The current vacancy rates in the retail and office sectors provide both a warning and an opportunity.
- Retail vacancy rates are tightening in desirable high-traffic corridors, especially for smaller formats and pop-up-friendly spaces. In the United States, the overall vacancy rate is 4.2% for the country’s 12.1 billion square feet of retail space, and that’s led to increased competition among occupiers, according to Costar.
- Office vacancies, particularly in B- and C-class assets, have been elevated, giving tenants significant leverage, especially in Q1 and Q2, when landlords are under pressure to fill space. That elevated level of office vacancies is expected to continue throughout the year and into 2026.
However, national averages can be misleading. Local micro-market insights, block-by-block trends, and demographic shifts are now more critical than ever. Opportunities vary significantly by region. Lease administrators and tenant reps must go beyond the data and ask: What do these numbers mean for this specific location, use case, and brand?
Landlord Concessions and Timing Tactics
In today’s environment, landlord concessions have become a key negotiating tool, and they vary significantly by asset class and region.
- Retail landlords are offering TI allowances, early termination clauses, and flexible expansion options in newer developments or redevelopments.
- Office landlords, on the other hand, are providing deeper rent abatement periods, full turnkey buildouts, and shared amenity upgrades.
But these incentives are time-sensitive. In markets where retail is heating up, the window to negotiate favorable terms is closing. Conversely, in office, waiting too long might mean missing out on desirable floor plates or access to premium amenities.
The message is clear: 2025 is not a year for reactive lease planning. It’s a year for precision and foresight.
How Strategic Advisors Add Value
This is where tenant rep leaders and savvy lease management teams can become invaluable. It’s not just about negotiating a lease; it’s about advising clients or internal stakeholders on the optimal time to execute, where to deploy capital, and how to leverage current market dynamics.
Whether it’s:
- Benchmarking existing leases against current market trends
- Timing renewals or relocations to coincide with seasonal dips in demand
- Or tapping into underutilized subleases or shared-space formats
…the best advisors in 2025 will be the ones who see around corners.
Navigating the Lease Market through 2025 and Beyond
The state of the lease market in 2025 is one of divergence, nuance, and rapid evolution. Retail and office are moving on separate trajectories, vacancy rates are more complex than surface numbers would have you believe, and landlord concessions are shifting with every quarter. For tenant rep leaders and lease managers, the strategic edge lies not just in execution, but in timing.
Now is the time to act with intention, supported by data, and guided by market-savvy partners.
