Office Leases Defy Economic Uncertainty

Uncertainty typically shortens planning horizons. In Mexico’s office market, at least for now, that does not appear to be happening. Despite an environment marked by weak private investment and elevated business caution, most office transactions recorded by SiiLA in 2026 continue to be signed with lease terms of three years or longer.

Through the second quarter of the year, companies continued to face an unfavorable investment environment. Banamex reported¹ that private investment posted its seventh consecutive year-over-year decline and fell 3.5% quarter-over-quarter in the first quarter of 2026, while business confidence remained in pessimistic territory at just 48.2 points in May. Although the bank expects investment to recover gradually during the rest of the year, it warns that the rebound will depend on higher public spending, lower real interest rates, and a more certain investment environment.

Despite that backdrop, medium-term leases continue to dominate. Three out of every four office transactions recorded by SiiLA through April were signed with lease terms of 36 months or longer. By contrast, only 6.5% were signed for less than two years.

Three-year leases typically offer a balance between stability and flexibility. They allow tenants to amortize fit-out costs, reduce relocation expenses, and maintain operational continuity without committing to excessively long time horizons in an environment that continues to evolve.

Lease duration also does not appear to reflect short-term economic incentives. Analysis of the transactions² found no statistically significant evidence that longer or shorter lease terms were associated with different monthly rental rates, even after controlling for variables such as transaction size, building class, and occupancy level.

This suggests that, at least for now, uncertainty has a greater influence on when companies decide to occupy office space than on how they negotiate their leases. That, however, does not mean uncertainty is irrelevant. If business caution ultimately reaches the market, the first signs are more likely to appear in transaction volume than in lease terms or negotiated rents.

Business caution, moreover, may not fade anytime soon. Banamex does not view the current environment as a temporary episode. Its baseline scenario assumes annual USMCA reviews through 2028 and warns that this would imply a slower recovery in private investment over the coming years. Should that scenario materialize, the first effects on the office market would likely be reflected in slower absorption. Only if that trend persists could the adjustment extend to the pace of new supply deliveries.

Understanding that sequence will be key to distinguishing between a market that is slowing and one that is simply waiting to grow again.

For more office market analysis and transaction data, visit SiiLA Market Analytics or contact us at contacto@siila.com.mx.

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¹ Banamex. Examen de la Situación Económica de México. Segundo Trimestre de 2026. Private investment, business confidence, and investment outlook indicators.

² Authors’ analysis based on office transactions recorded by SiiLA. The relationship between lease duration and monthly rent was evaluated using correlation analysis, simple and multiple linear regressions with robust (HC3) standard errors, as well as parametric and nonparametric group comparison tests. The multiple regression models controlled for leased area, building class, and occupancy level.