The third quarter of 2026 was a period of continuing normalization for the office real estate market. Organizations are coming back to the market and willing to make longer-term commitments.
Competition for Class A+ space in live/work/play environments remains elevated. Most of the distress in the market is concentrated in older and less desirable assets. Landlord financial situations may create a strategic opportunity to negotiate renewals early (such as through blend and extends) and achieve significant savings through reduced rent and tenant concessions.
National office real estate trends
- Leasing activity remains near its strongest level since 2019, helping to lower vacancy to 13.9%. Demand continues to improve, but long-term growth is expected to remain modest.
- New office development is constrained, narrowing future space availability for tenants. Demolitions and conversions continue to outpace new deliveries.
- Rent growth stayed positive in Q3 as demand for premium office space continued to outpace new supply. Tenant concessions appear to be stabilizing across many markets.
- Tenant demand is increasingly focused on high-quality office space. Premium buildings and amenity-rich locations continue to attract the strongest interest, intensifying competition for the best available space.
Download the full office real estate 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.
