Office properties are performing better than one might expect during the pandemic thanks to  attractive locations, diverse tenant bases, and long-term lease structures. However, all that is set to change unless there is a "full and soon" recovery in the greater economy. In the meantime, price discovery has been challenged and if the recovery takes longer than expected certain cities could lose their premium pricing. 

That's according to a new report out from Reonomy called "Workplace Worries: Opaque Office Outlook" which looked at over 535,000 transactions valued at $500,000 or more in retail, industrial, multifamily, and office space across 336 metropolitan standard areas in the US 

Reonomy's research found that the average office lease currently sits at 6.7 years for properties in publicly-listed real estate investment trusts. That means that about 15% of the market comes open or up for renewal each year. During the pandemic, the report finds, leases are less likely to be renewed immediately with employers adopting more flexible remote work policies and facing budget constraints, downsizing, or possible bankruptcy. "The typical company spends close to a tenth of its budget on its office space, so this is an area that will likely come into focus for expense reduction if the recovery is slow," the report concludes.