Gateway markets reclaim leasing focus in post-pandemic Financial Services sector

July 07, 2023
  • Sarah Bouzarouata

Despite the challenging operating environment, financial services (FS) organizations are prioritizing talent cultivation and innovation. Occupiers continue to diversify their office portfolios to tap into niche talent pools, though there is a renewed focus on creating magnetic hubs in markets with scalable talent. In support of this trend, leasing in gateway markets as a share of overall FS leasing activity rebounded to pre-pandemic norms after declining significantly during the height of the pandemic.

At the pandemic’s peak in 2020 and 2021, the share of FS leasing in gateway markets fell from 42% in 2019 to 34%, driven by shifts to remote work and migration patterns. However, the shift has proved fleeting, with a resurgence to centralized locations in key FS hubs that are crucial for maintaining a robust talent pipeline and achieving long-term business goals. Since 2022, these hubs captured a greater share of overall FS leasing, even surpassing 2019 levels. Gateway markets accounted for nearly 44% of the total space leased by FS firms, underscoring the strategic importance of scalable talent in a fluctuating landscape.​

While demand in growth markets remains resilient and accounts for a fifth of overall FS leasing, growth is expected to be at a slower pace than the post-pandemic response as firms maintain expense discipline.​