Office vacancies notch first post-pandemic annual drop: CBRE

Office Vacancies Show First Post-Pandemic Annual Decline: CBRE

According to CBRE's Stefan Weiss, average asking office rents, adjusted for inflation, remain at the lowest level since the late 1980s despite a recent increase. The vacancy rate has improved but is still significantly above the long-term average of 12% to 14%, signaling that the office market slump driven by the pandemic's shift to remote and hybrid work is beginning to improve.

Rents are starting to respond to these changes. Office asking rents (excluding concessions) increased by 1.7% year-over-year to $32.47 per square foot annually in Q3, up from $31.92, Weiss reported. However, inflation-adjusted rents remain near their lowest point since around 1988.

“Users of prime space are seeing the market is tighter but it’s still a tenant-favorable market for anything outside of that prime product,” Weiss stated in an interview. He also emphasized that most corporate-related costs are rising faster than rents, maintaining a market advantage for tenants outside top-tier buildings.

There are early signs that demand is stabilizing, partly due to return-to-office efforts and increased interest from financial services and tech companies seeking larger office spaces. The average space allocated per office employee, which hit a low of 146 square feet two years ago, has slightly increased to 149 square feet.

Author's summary: Office vacancies are beginning to decline and rents are slowly rising, but the market remains tenant-favorable outside prime office buildings as demand stabilizes with return-to-office trends.

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CFO Dive CFO Dive — 2025-11-04

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