Office markets move in cycles. Some years, good space is scarce and landlords set the terms. Other years, vacancy climbs, buildings sit partly empty, and the balance of power shifts toward the tenant. Knowing which kind of market you're in is the first step to negotiating well.
Why vacancy rises
Vacancy usually climbs when companies give back space faster than new tenants take it. Hybrid work, cost cutting, and leases that expire during a slowdown all push in that direction. Newly built space coming online at the same time adds to it. The result is more choice for tenants and more pressure on owners to fill their buildings.
What landlords offer when buildings are empty
In a soft market, landlords compete with concessions rather than lower face rent. Expect to see free rent, larger improvement allowances, landlord-funded build-outs, and more flexible terms. These can be worth more than a rate reduction, because they lower your total cost of occupancy without changing the headline number the landlord reports.
Not every building is soft
High vacancy is rarely spread evenly. The newest, best-located buildings often stay competitive even when the overall market is weak, while older buildings and less convenient locations carry most of the empty space. That means your leverage depends on what you're shopping for. A tenant considering several types of buildings has more options, and more negotiating power, than one locked on a single address.
Watch the landlord, not just the deal
A building with a lot of empty space can also signal an owner under financial strain. Before you sign, make sure the landlord can deliver what it promises: the improvement allowance, the build-out, and ongoing services. Ask how allowances are funded, look for protections if the building changes hands, and confirm your rights if promised work isn't completed.
How to use the moment
Start early so you have time to compare real alternatives. Look at the full package, not just the rate. Negotiate the terms that will matter later, such as renewal options, expansion rights, and the ability to sublease, because those are easiest to win when landlords need tenants. And remember that markets recover. The flexibility you secure now protects you when conditions turn.
A soft market is an opportunity, but only for tenants who prepare. Know your requirements, understand your options, and negotiate the whole lease.