U.S. office vacancy dips as recovery spreads to more markets

Cushman & Wakefield (NYSE: CWK) released its Q2 2026 U.S. Office Marketbeat report, showing national office vacancy declined 10 basis points year-over-year to 20.1%, the second consecutive quarter of year-over-year decline.

Vacancy fell both quarter-over-quarter and year-over-year in 49 of the 92 U.S. markets the firm tracks. San Francisco, Orange County and Midtown Manhattan recorded the largest annual vacancy declines.

Net absorption totaled negative 360,000 square feet during Q2, though upward revisions to prior quarters pushed the four-quarter rolling total to a positive 14.3 million square feet, the strongest level since 2020 and the seventh consecutive quarter of improvement.

Vacant sublease space fell 15.4% year-over-year to 95.6 million square feet, now 28% below its Q1 2024 peak and at levels last seen in early 2021. Available sublease space represents 1.8% of total U.S. office inventory.

New supply remained constrained, with office completions declining 24% year-over-year. The four-quarter rolling total of 15.6 million square feet was the lowest since 2012, and the national construction pipeline stood at 19.7 million square feet, approximately 0.4% of total inventory.

Total U.S. office inventory declined by 0.6%, or 33 million square feet, over the past five quarters as properties were converted or repositioned, with 20 markets shrinking by at least 1% during the past year.

"The first half of 2026 reinforced that the office recovery is no longer confined to a handful of leading markets or trophy assets," said David C. Smith, Head of Americas Insights at Cushman & Wakefield. "Demand has improved for seven consecutive quarters, vacancy is beginning to decline across more than half of the markets we track, and the amount of available sublease space continues to shrink."

You May Also Be Interested In

• Accuray names two executives to new and existing roles
• Anthropic Said In Talks To Buy Ai Startup Decart For $6 Billion - Bloomberg
• Southland Holdings (SLND) Misses Q2 EPS by 122c