As the omicron variant continues to threaten a return to pre-COVID normalcy, many office tenants are questioning whether the market is continuing to soften. On the hunt for advantageous deals, occupiers are pondering renegotiating existing leases or reducing their footprint to remain competitive in a tight labor market. 

But while the market has slowly softened… extreme deals for occupiers are rare,"  says Kirsty Cameron of Savills in a new report. "The reason for this is while most office employees have worked from home throughout the pandemic, many companies continued to pay for their office space. Availability increased throughout the pandemic as occupiers who had leases up for renewal or chose to sublease their office space. For landlords to maintain financial and operational sustainability, their strategic response to the pandemic has been and continues to focus on increasing concession packages and deploying other occupier benefits before dropping rental rates."

And compared to other economic crises, the "black swan" economic impact of the pandemic impacted CRE quickly. The uncertainty associated with openings, reopenings, and emerging variants has led to the market remaining steady, instead of greatly softening.