Office rental vacancy

Office rental vacancy reached 20.7% in 2025, reflecting a continued increase in unoccupied commercial space across US markets. Despite efforts by companies to encourage employees to return to office environments, a significant portion of the workforce remains remote following workplace shifts that occurred during the pandemic. Flexible workplace policies and the construction of speculative office buildings in high-activity areas have contributed to sustained vacancy levels. The current rate represents a historic high, surpassing previous peaks of 19.3% recorded during economic downturns in 1986 and 1991. These trends continue to dominate the office property market, with remote work arrangements fundamentally altering traditional office space demand patterns.

Office rental vacancy has increased dramatically over the past five years, rising from 17.5% in 2020 to 20.7% in 2025. The most significant jump occurred in 2020, when vacancy rates increased by 0.9% as organizations rapidly adopted remote work policies in response to the pandemic. This period marked a fundamental shift in workplace arrangements that persisted beyond initial health concerns.

The expansion continued through 2022-2024, with vacancy rates climbing steadily as companies adapted permanent remote and hybrid work policies. The rise from 18.6% in 2022 to 20.1% in 2024 reflected employers' struggles to bring workers back to traditional office environments. Despite attempts by some organizations to remove remote positions or incentivize in-office attendance, a substantial proportion of employees remained remote, limiting demand for conventional office space.

Construction activity paradoxically contributed to rising vacancies during this period. Developers continued building new office spaces in prime business districts, anticipating eventual demand recovery, but these properties often remained unleased. The combination of reduced occupancy from existing tenants and increased supply from speculative construction created a supply-demand imbalance that drove vacancy rates to historic levels. Major metropolitan areas experienced particularly acute increases, with cities like San Francisco seeing vacancy rates rise by 5.4 percentage points over twelve months.