Demand holding steady with active deal pipeline growing
Insight
U.S. Office Market Dynamics, Q2 2025
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- Leasing volume held essentially flat in Q2 (-2.2%), but active space requirements grew by 5.8% quarter-over-quarter and currently reflect the highest levels of demand since Q4 2021.
- Office occupancy held relatively firm in Q2 as modest negative net absorption was recorded in Q2 (-2 million s.f.), an improvement relative to the -7 million s.f. experienced in Q1.
- NYC and select Sun Belt markets – including Atlanta, Austin, Dallas, Houston, Nashville and Tampa – registered positive net absorption in Q2.
- Trophy buildings across Miami, NYC, SF and other markets captured all-time high rents.
- Average asking rent within the construction pipeline has grown 27% year-over-year and currently stands at $92.38, the highest level on record by a substantial margin.
- Overall inventory declined by another 700,000 s.f. nationally in Q2 as deliveries continue to be outweighed by inventory removals for conversion and redevelopment.
- Although 7.7 million s.f. delivered in Q2, more than 8 million s.f. was removed for conversion, and under 1 million s.f. of new projects broke ground.