According to Newmark executives, companies planning space based on peak office occupancy is becoming one of the trends supporting the prolonged recovery of the U.S. office market. This shift contrasts sharply with pessimistic analyst forecasts during the pandemic, when some believed that if employees worked remotely half the week, tenants would need only half the space.

"Office tenants today know they need to accommodate Tuesday and Wednesday attendance... to ensure employees have desks or available space when they come in," Jessica Morin, national director of tenant research at the New York-based commercial real estate services firm, told CFO Dive. "So we haven't seen the massive space reductions we saw during the pandemic."

To be sure, tenants are leasing less space per office position. But Morin noted the figure is only about 11% lower than in 2019, before the pandemic, at roughly 122 square feet. She mentioned that some had previously predicted the number could drop by as much as 40%.

Newmark forecasts in its commercial real estate outlook that the office market will continue to stabilize in 2026. The report notes that over 70% of tenants currently searching for office space are seeking to maintain or expand their leased square footage, and most tenants have completed space adjustments for hybrid work models. Additionally, reduced new supply and demand from AI-related companies for office space are jointly supporting market strength.

However, hybrid work models could still deliver more shocks to the office market, as roughly half of U.S. office leases signed before the pandemic have yet to expire. According to Newmark's third-quarter 2025 office report, about 1.4 billion square feet of leases are set to expire between 2025 and 2027, which will provide tenants with opportunities to adjust and reassess their space needs.

Despite occasional announcements from large employers that five-day in-office attendance will become the norm, Morin still expects that the current hybrid model of three days in the office per week will dominate over the next year.

"My crystal ball tells me that what we have right now is basically the steady state," Morin said. "There will certainly be some employers who continue to push for five days in the office, but I think many employers have accepted the average of three days."

For CFOs looking to sign new leases, concessions are still negotiable in the current market if they are willing to look beyond top-tier office buildings. According to Newmark's third-quarter report, nominal rents rose 0.5% year over year, but effective office rents have still fallen 19% cumulatively since 2020.