The U.S. office market has shown early signs of stabilization, with leasing and sales activity gaining momentum into mid-year 2025. These trends suggest the worst may be behind us, although macroeconomic uncertainty continues to cloud the outlook. 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 at mid-year 2025.
A few noteworthy facts from our research:
- U.S. availability was 24.5% in Q2, down 30 basis points (bps) from 24.8% reported last quarter, as well as down 70 bps from 25.2% reported a year ago. Many local markets continue to see notable declines in availability—suggesting a post-pandemic peak in availability. However, the leasing market recovery remains uneven across geographies.
- Leasing activity surpassed 50.0 million square feet (msf) for the fifth consecutive quarter at 55.8 msf. This is the strongest first half of the year in terms of leasing activity since 2019.
- In H1 2025, 74.1% of larger transactions consisted of new leases and relocations as occupiers upgrade their space. However, if economic uncertainty persists, occupiers may begin delaying major leasing decisions in favor of renewals and short-term extensions again.
- Office sales volume is up in H1 2025 as sellers have become more realistic about current valuations. In addition, CMBS office loan volume is also up as lenders have returned to the office sector, albeit at the trophy Class A segment of the market as flight to quality pertains to lenders as well.