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Q1 2025 U.S. Office Real Estate Market Report

May 19, 2025 / 10 min read

The office market remains complex. Demand is rising, but national vacancy rates remain high at 13.9%. Smaller occupiers are upgrading spaces, while larger ones are staying put. The supply pipeline is shrinking, and rents are expected to grow modestly.

As we enter the first quarter of 2025, the office real estate market presents a complex picture. Demand for office space has been on the rise since late 2024, led by New York's surge in office attendance and a recent government return-to-office mandate. Despite this, ongoing supply additions have kept the national vacancy rate near a record high of 13.9%. While some markets are showing signs of recovery, demand remains weak in many major areas.

Smaller occupiers are upgrading their spaces, but larger ones are staying put due to limited availability in premium buildings and slower headcount growth. The supply pipeline is shrinking, with only 67.4 million square feet under construction, the lowest since 2012. Rents are expected to grow modestly at around 1% per year through 2026. Economic uncertainties, including inflation and interest rates, pose risks to this outlook, but increased attendance requirements and potential fiscal stimulus could support office demand.

National office real estate trends

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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.

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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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