Tenant Power Play: How Smart Companies Are Using Office Vacancy to Win Better Deals

If you’re a business owner in Davis, Salt Lake, or Utah County looking at office space in 2026, here’s the honest truth: you have leverage right now.

Office vacancy across Salt Lake County remains elevated. Davis County is tighter, and Utah County is steadier, especially in the growth corridors. Across the Wasatch Front, landlords are still motivated, and that creates opportunity for tenants who understand how to negotiate.

At the same time, there’s a clear shift in how companies are thinking about space. Instead of chasing large footprints, many are targeting high-quality offices in the 1,000 to 5,000 square foot range, particularly in Class A buildings and properties with top-notch amenities. Alongside this trend, more owners are asking a different question: Should we keep leasing, or does it finally make sense to buy our own building?

I help companies navigate both decisions every week. Here’s how the market is actually behaving, and how tenants and owners are using it to their advantage.

Where Tenant Leverage Lives

The office market has largely stabilized after the hybrid-work reset. Absorption improved last year, but availability is still elevated, especially outside the very top-tier assets. That imbalance is where tenant leverage lives.

What I’m consistently seeing tenants negotiate successfully includes:

• Free rent, often one to five months

• Strong tenant improvement packages, commonly $30 to $50 per square foot in higher-vacancy Salt Lake submarkets

• Shorter lease terms, typically one to five years

• Flexibility, such as expansion rights, early termination options, and workable sublease language

In tighter areas like Davis County, tenants are often able to bundle value through parking, storage, EV charging, signage, or upgraded finishes instead of simply pushing rent. In Utah County, especially for tech, engineering, and professional services firms, growth-friendly lease structures remain very achievable.

Handled correctly, tenants are routinely landing ten to twenty percent better overall deal value than they would by simply accepting a landlord’s first proposal.

The Rise of Right-Sizing (1,000-5,000 SF)

One of the most consistent trends across the Wasatch Front is demand clustering in the 1,000 to 5,000 square foot range, particularly in Class A and newer Class B-plus buildings. This isn’t downsizing out of fear. It’s right-sizing with intention.

Companies are supporting hybrid schedules, designing more efficient layouts, and prioritizing quality, location, and experience over raw square footage. Instead of asking how big their office needs to be, they’re asking what their office actually needs to do.

Amenities as a Space Multiplier

A major driver of the 1,000 to 5,000 square foot trend is the rise of shared, building-level amenities that replace space tenants used to build inside their own suites.

Smart tenants are intentionally targeting buildings with:

• Shared conference rooms

• Common collaboration areas

• High-quality break rooms

• Training or event space

• Fitness or wellness areas

• Outdoor space

• Shared reception or touchdown zones

In the right building, these amenities can replace fifteen to thirty percent of what tenants used to lease, allowing companies to occupy smaller, more efficient suites without sacrificing functionality or culture.

The Hidden Advantage of Amenity-Rich Buildings

There’s also a hidden benefit that often gets overlooked. Buildings that have already invested in amenities tend to lease faster, attract higher-quality tenants, and still want to fill smaller suites.

That combination often creates negotiation leverage, especially for tenants in the 1,000 to 5,000 square foot range. Tenants can frequently secure better tenant improvement packages, shorter lease commitments, and expansion or contraction flexibility, all while landing in buildings that help recruit and retain talent.

Lease or Buy? Understanding the Trade-Offs

Leasing remains the right move for many businesses. It’s flexible, capital-light, and lower risk upfront, especially if headcount or hybrid needs are still evolving.

But for the right company, buying an owner-user building can be a strong long-term play, particularly in Utah.

Beyond control and equity, one of the biggest reasons owner-users buy is tax efficiency. Commercial buildings can be depreciated over thirty-nine years, providing annual non-cash deductions that reduce taxable income while the property may still be appreciating. Many owners can further accelerate deductions through cost segregation, which allows certain building components to be depreciated faster and improves early-year cash flow.

Mortgage interest on an owner-user loan is deductible, while principal payments build equity, unlike rent, which is a pure expense. Owners can also deduct ordinary property expenses such as property taxes, insurance, repairs, and maintenance. Over the long term, ownership offers flexibility through potential capital gains treatment or 1031 exchanges when selling.

This is not tax advice, and every situation is different, but these are well-established benefits that business owners should understand before defaulting to a lease decision.

Why Owner-Users Are Still Buying in Utah

Utah continues to benefit from strong population growth, job creation, and limited new office construction in many submarkets. Buying at today’s basis, while vacancy remains elevated, allows owner-users to lock in occupancy costs, tax advantages, and long-term optionality.

The Bottom Line for Office in 2026

The takeaway for 2026 is simple:

• Lease if you want flexibility and want to use today’s vacancy to extract every concession possible.

• Buy if you plan to stay put for five or more years and want stability, equity growth, and long-term efficiency.

If you want to run the numbers on your specific situation, whether that’s optimizing a lease in a 1,000 to 5,000 square foot Class A building or evaluating an owner-user purchase, I’m happy to help. No pressure. Just real math, real options, and a strategy that puts you ahead.

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Artie Lucero is a Jack of All Trades for Legend. His main focus is in office, but he does work across a variety of asset classes, including industrial, land, and investment sales. Artie has over a decade of experience in commercial real estate, guiding his clients and providing top-notch advice for their situation.