Vacancy begins to decline as office enters a new growth cycle
- Leasing activity established a new post-pandemic high in Q4, and annual leasing grew 5.2% YoY.
- Large-scale transactions increased by roughly 15% YoY as companies are developing more confidence to execute long-term commitments to their workplaces.
- Net absorption was meaningfully positive in the second half of the year, driving year-end totals to 6.4 million s.f. of occupancy gains.
- Downsizing activity for larger expirations has fallen to negligible amounts, allowing a new expansionary cycle to begin.
- For seven consecutive quarters, U.S. office sales volume has increased compared to the previous year, and total transaction volume grew by 35% in 2025.
- Distress levels remain high but are tentatively declining in the last two months of the year.
- The construction pipeline continues to rapidly descend to record lows. Inventory currently under construction is now more than 20% lower than previous historic lows measured in 2011.
- Groundbreakings marginally declined from record lows in 2024.