First co-working was set to be the death knell for the long-term, 10-year corporate real estate lease. And then the response to the pandemic, with its calls for flexibility, was also poised to render the 10-year lease as anachronistic as phone booths and shared coffee mugs.

It’s certainly the case that for many companies, already adjusting to increases in remote work and shifting business strategies, a 10-year lease term is too long. But not all.

“The 10-year lease had already been endangered because of the advent of WeWork and Knotel,” David Levy, a principal at brokerage Adams & Company, said in an article in The Commercial Observer. “However, smart companies — wise companies, companies that are more long-term thinking — are reaching for 10-year deals now. And most of the leases we’re making today are 10-year leases.”

In Manhattan, for example, the TAMI sector (technology, advertising, media and information) has made inroads into the traditional tenant base of the FIRE sector (finance, insurance, real estate). 

These TAMI firms are not necessarily opposed to 10-year leases, though it can be more of a mixed bag. TikTok, for instance, took space in Durst’s One Five One for 10 years in one of the biggest Manhattan leases of 2020 so far, while Apple took five years with a possible extension in Vornado Realty Trust’s 11 Penn Plaza in another big leasing deal this year. (It also in late November subleased additional space in the same building for six years.), according to the article.

“Then there’s the sublease situation. The emptying of offices due to stay-at-home advisories, and the resulting reassessment by many companies of just how much Manhattan office space they really need, has also left the city with a record volume of such space — well over 16 million square feet by November and growing by the week, according to various brokerage reports…This has put downward pressure on rents, and that means more tenants can be opportunistic — whether it’s the rents they want to pay, the addresses they want to occupy, or the lengths of their leases. It’s a very unsettled time.”