The U.S. office market continued to improve in Q2, with leasing activity reaching its strongest level since 2019 and vacancy declining to 13.9%. Demand has now expanded for four consecutive quarters, signaling continued stabilization after several years of occupancy losses. However, the recovery remains uneven, with tenants competing for a limited supply of top-tier space as new construction remains near historic lows. While slow population growth and labor force stagnation continue to constrain long-term demand, current leasing trends suggest market conditions are moving in a more positive direction.
National office real estate trends
- Leasing activity reached its strongest level since 2019, helping lower vacancy to 13.9%. Demand continues to improve, but long-term growth is expected to remain modest.
- Office construction activity remains near historic lows, with just 47.6 million SF under construction nationwide and only 30.9 million SF delivered over the past year. At the same time, demolitions of obsolete buildings continue to shrink the national office inventory.
- Rent growth remains muted at a national level, with rents increasing modestly compared to inflation since 2020. Limited new supply and a shortage of trophy-level office space are expected to gradually strengthen landlord pricing power.
- As availability remains tight in top-tier buildings and future supply remains limited, occupiers may benefit from evaluating lease options earlier in the decision-making process.
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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.
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.
