The global office-leasing market is still struggling to regain its footing following its pandemic-induced doldrums, judging by a new report.
Office attendance has stabilized at about 30% below pre-pandemic levels, noted FinQuery (citing McKinsey data) in its 2025 CFO’s Benchmark Report for Strategic Leasing.
With employees now working from the office an average of 3.5 days per week, demand for office space in major cities is projected to decline by up to 13% by 2030 in moderate scenarios and 28% in severe scenarios, wrote FinQuery, a vendor of AI-based accounting software for leases as well as prepaid and accrual accounting.
According to the report, which drew from FinQuery’s database of some 9,000 customers, 67% of U.S. companies now offer work-location flexibility.
High-value building leases with annual liabilities of $1 million to $2 million have declined by a compound annual growth rate (CAGR) of -9.7% since 2019.
At the same time, low-value leases with liabilities of less than $100,000 have shown a CAGR of +6.1 % since 2019, as companies seek smaller, flexible office spaces “in an increasingly remote-first world,” the report said. That’s particularly so among small and midsize companies in the technology and professional services sectors.
The global flexible office market is expected to expand from $34.75 billion in 2023 to $96.77 billion by 2030, according to the report.
“The trends in lease liabilities reveal a critical need for flexibility and strategic planning,” said FinQuery CFO Justin Smith, who recently was appointed to the additional position of chief operating officer. “CFOs are increasingly prioritizing smaller, more adaptable leases to respond to market shifts while ensuring long-term financial resilience.”
The heightened priority on flexibility also extends to lease durations. Short-term leases (less than two years) often come with a rate premium of 10-15% higher per square foot than long-term leases. However, rising inflation, shifting work dynamics, and geopolitical risks have led CFOs to favor short-term leasing to ensure flexibility, according to the report.
Demand for short-term leases of office space has surged by a remarkable annual average of 33.7% since 2019. The median lease duration, which was six to eight years before 2019, has been reduced to three to four years.
Meanwhile, as opposed to the broad office-lease market, equipment and vehicle leasing continues to surge. In 2023 the U.S. equipment finance industry reached a record high value of $1.34 trillion.
The momentum continued last year, with preliminary data indicating a 5.3% expansion in equipment and software investment, to a total of approximately 2.3 trillion, according to FinQuery. Almost 58% of that investment was financed through loans, leases, or lines of credit.
Approximately 45% of CFOs in manufacturing industries are increasing equipment-leasing budgets to accommodate digital transformation initiatives, the report said.
Industry forecasts project a further 4.7% growth in equipment and software investment for 2025, with stronger activity expected in the year’s second half
