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Q1 2024 U.S. Office Real Estate Market Report

April 26, 2024 Article 10 min. read
Ron Gantner Plante Moran Realpoint Rick Pifer Plante Moran Realpoint
A renewed focus on the efficient use of office space led to further footprint reductions and higher overall real estate vacancy in 2023. The national vacancy rate currently stands at a record 13.8%.
Three quarters overhead view of a busy modern office space

A renewed focus on efficient use of office space led to further footprint reductions. Occupiers have given back 64.6 million square feet (SF) in the past 12 months, bringing cumulative net move-outs to over 200 million since March 2020.

There is a small silver lining: the plunge in construction precipitated by rapidly rising interest rates means new supply will be historically low after current projects complete, which should tighten the market for new space considerably within a few years.

National office real estate trends

  • Tenants gave back 58 million SF in 2023, making it the fourth straight year of negative absorption. Cumulatively, the amount of occupancy lost since 2020 is four times the amount recorded during the Great Recession.
  • A staggering 204 million SF is available for sublease, over half of which lies vacant. This is down somewhat since mid-2023 but is still approximately twice what it was at the end of 2019.
  • Landlords and owners are continuing to grant longer periods of free rent and higher tenant improvement packages.
  • Developers delivered just under 57 million SF of new office space in 2023, the least since 2014. A more typical amount of approximately 50 million SF is expected in 2024, leading to less than 25 million SF in net deliveries in 2025 and 2026 combined.
  • Construction starts fell to 32 million SF in 2023, the lowest amount since the 30 million recorded in 2010, in the aftermath of the Great Recession.

Download the in-depth market report to learn more

If you’d like to learn more about the nation’s office real estate outlook, download the full report below. This report will give you full insight into the topics mentioned above along with a variety of other statistics to help you stay ahead of market trends.

Information contained in this report is provided, in part, from third-party sources, including the U.S. Bureau of Labor Statistics, the Bureau of Economic Analysis, Engineering News-Record, and CoStar Group. Even though obtained from sources deemed reliable, no warranty or representation, expressed or implied, is made as to the accuracy of the information herein.

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