Cushman & Wakefield’s US Office Report 2025 Takeaways
Key OFFICE Takeaways For Q3 2025
- Demand for high-quality office space gaining even more momentum. After years of portfolio rightsizing, companies are expanding footprints, especially in top-tier buildings. Class A net absorption has been positive for two straight quarters, with four-quarter rolling absorption topping 3 million square feet (msf) in Q3—a level not seen since early 2020.
- The rest of the U.S. market is also on an improving trajectory. Demand has strengthened over the past year and is spreading nationally. In Q3, half of U.S. markets posted positive absorption, up from a third two quarters ago.
- Supply-side pressures continue to ease. Available sublease space has declined 14.5% since the beginning of 2024 as tenants have found sublessors or taken the space back for their own use. New construction deliveries continue to fall: the 13.4 msf delivered year-to-date is half of last year’s pace and just 38% of the 10-year average.
The U.S. Office Recovery Is Taking Hold
The combination of improving demand and slowing new supply is helping stabilize the broader office market. Net absorption was -4.3 msf in Q3 2025, the 13th consecutive quarter of negative absorption. However, gross leasing activity is trending consistently higher, absorption for Class A assets is positive and improvements are spreading across a greater number of markets.
Recovery remains uneven but is becoming more widespread. In Q3, 46 of 92 tracked U.S. markets posted positive absorption—a 50% jump from the 31 markets two quarters earlier. Excluding the five weakest markets, national absorption was slightly positive (+289,000 sf) in Q3 2025.
Occupier activity is growing with five markets surpassing 1 msf: Midtown Manhattan (+5.4 msf), San Jose (+3.3 msf), Midtown South Manhattan (+1.7 msf), Nashville (+1.2 msf) and Northern New Jersey (+1.2 msf). Nearly a third of U.S. markets have had net demand over the past year that exceeds 100,000 sf.
- Gateway & Gateway Adjacent: Midtown Manhattan, San Jose, Midtown South Manhattan, Northern New Jersey, San Francisco, Los Angeles Non-CBD
- Midwest: Kansas City, Des Moines, Columbus, Cincinnati, Tulsa
- Mountain West: Salt Lake City, Phoenix, Reno
- Northeast: Baltimore, Syracuse
- Southeast: Nashville, Atlanta, Tampa, Charlotte, Miami, Charleston, Greenville, New Orleans, St. Petersburg
- Texas: Austin, Dallas, El Paso, Fort Worth
Strengthening tenant demand is also leading to declines in vacant sublease availabilities. At 117.3 msf, vacant sublease space represents 2.2% of total office inventory, down 30 basis points (bps) YOY. Sublease space has shrunk by 14.5% from its Q1 2024 peak, with 55 U.S. markets having experienced YOY declines.
Class A Offices Capture Disproportionate Share of Tenant Demand
Top-tier office space continues to outperform the broader market. Companies aiming to boost in-office attendance and employee experience are gravitating toward high-quality buildings in prime locations with the right mix of amenities and services. This is reflected in Class A data, with net absorption positive in three of the past four quarters.
Class A four-quarter rolling absorption turned positive in Q3 2025, reaching +3.0 msf—the first positive reading in over three years and the highest since Q3 2020. Nearly 60% of U.S. markets saw positive Class A absorption over the past year, led by Midtown Manhattan, Nashville, Midtown South Manhattan, and Austin.
As the market grows more quality-sensitive, vacancy is concentrating in buildings that are competitively obsolete. This is creating a trifurcated market: top-tier space is highly occupied and vacancy is tightening (half of U.S. office buildings are fully occupied). As construction deliveries decline, demand is moving down the quality spectrum to other Class A buildings. Fourteen markets posted positive Class A absorption despite overall negative absorption, including Downtown Manhattan, Houston, San Diego, Raleigh/Durham, Pittsburgh, and Tucson.
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