The U.S. office market stands at a crossroads, as leasing gains and early signs of recovery meet renewed economic uncertainty. We’re pleased to share the latest State of the U.S. Office Market, our quarterly report offering key insights into office leasing dynamics and capital markets trends. This edition also highlights recent shifts in office occupancy and workplace mandates, along with a comparison of local market performance against national trends.
A few noteworthy facts from our research:
- U.S. availability held steady year over year at 24.8% in Q1, but many local markets are seeing notable declines—suggesting the bottom may have passed in those areas. However, recovery remains uneven across geographies.
- Leasing activity surpassed 50.0 million square feet (msf) for the third consecutive quarter, signaling a potential inflection point for the office market. Still, economic volatility may slow progress.
- In Q1 2025, 70.9% of transactions consisted of new leases and relocations, but if economic uncertainty persists, occupiers may begin delaying major leasing decisions in favor of renewals and short-term extensions.
- Return-to-office mandates are gaining momentum, with over half of Forbes top 200 companies following a fixed hybrid schedule, while 24.0% have an office-first model, 17.1% use a flexible hybrid approach, and only 2.5% maintain a remote-first model.
- The wave of office loan distress is not over, with additional lender-facilitated sales, deeds-in-lieu of foreclosures, and foreclosures expected as troubled loans continue to cast a shadow over the sector.