A growing cohort of corporate tenants is recommitting to large blocks of commercial real estate, helping to lay the foundation for a recovery of the national office market.

Across the United States, renewal deals among large tenants including Bank of America, mortgage giant Fannie Mae, investment firm Bain Capital and telecommunications provider Verizon account for almost half of the 156 office leases spanning 100,000 square feet or more that have been signed since the beginning of this year, according to CoStar data, on track to surpass last year's activity. Those renewal agreements collectively total more than 14.1 million square feet, and while there are some companies reducing their space or relocating elsewhere, a large portion are staying put.

"Most organizations now have a much clearer picture of how they want to use their office space, but they're also behaving more conservatively now," said Phil Mobley, CoStar Group's national director of market analytics. "They are more apt to renew in place than they were a year ago, when more of them were doing the 'move-and-shrink.' They're doing this in part to avoid the expense of relocating, but also because there is beginning to be less available premium space in ideal locations."

Boston drug developer Vertex Pharmaceuticals, for example, signed a renewal deal earlier this month to maintain its corporate headquarters at 50 Northern Ave. and 11 Fan Pier Blvd., two buildings that total more than 1.1 million square feet. The company had considered other options in and around the city's Seaport District but ultimately decided to keep its existing address, extending its term — originally slated to expire in late 2028 — through 2044.

In Plano, Texas, hotel management company and operator Aimbridge Hospitality extended the deal for its corporate headquarters at HQ53 on Legacy Drive, signing on to fill the entire 248,661-square-foot property for an additional five years.

To be clear, the latest round of high-profile renewals are existing blocks of space companies already occupy and are simply choosing to keep. While that is a better outcome than dumping it on the sublease market, downsizing or terminating the deal altogether, they aren't agreements generated from new sources of demand.

"The upshot is that it is supporting overall occupancy because there are fewer move-outs, but it's not really net-new demand," Mobley said. "I read it as cautious behavior."

A broad range of office tenants across the United States are adjusting their real estate portfolios to adapt to a COVID-19 pandemic-era reality where they don't need as much space. Portions of the workforce have yet to return to a full five-day workweek, and some companies have offloaded extraneous space to curb expenses and prioritize profitability.

Tenants collectively signed on for about 395 million square feet last year, according to CoStar data, about 13% below the annual average reported in the years leading up to the pandemic's 2020 outbreak. What's more, those deals are about 16% smaller on average than those signed between 2015 and 2019, exacerbating the vacancy challenges and onslaught of available space littered across the country's largest office markets.

Even so, for many landlords, renewal news is good news.

For national real estate investment trusts, including BXP, Douglas Emmett and Franklin Street Properties, renewal activity has been outpacing new lease volume.

Media and financial data giant Bloomberg's decision to extend the lease for its Manhattan headquarters was not only the largest single office lease to be signed so far this year, but also accounted for nearly two-thirds of the 1.6 million square feet of deals landlord Vornado Realty Trust inked throughout the second quarter ended June 30.

“I firmly believe in New York City's continued growth as a global capital that creates jobs and attracts top talent," founder Michael Bloomberg said in a statement at the time of the deal. "I also believe in the power of in-person work to drive collaboration and innovation, and 731 Lexington’s open spaces help us do that."

That prioritization of in-person work has meant an increasing pool of tenants, many of whom had significantly scaled back as a result of pandemic-induced trends, are now realizing their need for additional space.

Nearly 40% of the respondents in CBRE's latest office occupier sentiment report expect to increase their spatial requirements over the next three years, a marked spike compared to the 20% share that planned to expand last year.

That jump underscores the shift away from the post-pandemic focus on real estate reductions, the report's authors wrote, adding that while a large portion of tenants are weighing possible relocation as a way to upgrade their space, about 80% of respondents are considering renewals to avoid the high costs of moving and building out space.

Larger companies, or those with upward of 10,000 employees, are the most likely to downsize, CBRE reported, often due to the need for less space because of hybrid work policies, to address inefficient or excess spaces that existed before the pandemic, or simply to reduce extraneous costs. Oftentimes, those reductions are timed to coincide with lease expirations, and some could opt to renew leases but shrink how much space they ultimately occupy at a property.

The national mortgage giant known as Fannie Mae, for example, decided earlier this month that it would keep about half of its space at Midtown Center in Washington, D.C., confirming that it will lease about 340,000 square feet from landlord Carr Properties for a smaller headquarters presence at 1100 15th St. NW. The federal government-sponsored company had earlier this year looked to offload all of its 713,500-square-foot space at the two-building complex more than half a decade before its lease was set to expire in June 2029.

For other companies, renewals can serve as a bridge to maintain their real estate footprints while they figure out their long-term growth strategies.

Bank of America, for example, recently signed a 10-year extension for about 553,800 square feet at 16001 N. Dallas Pkwy. in Addison, Texas. The financial giant also signed on to be the anchor tenant at Parkside Uptown, an about 500,000-square-foot office tower in nearby Dallas that is slated to finish construction sometime in 2027.