Office vacancies notch first post-pandemic annual drop: CBRE

Office Vacancies Show First Post-Pandemic Annual Drop

According to CBRE’s Stefan Weiss, average asking office rents, when adjusted for inflation, remain at their lowest level since the late 1980s despite recent increases. The improving vacancy rate, although still well above the long-term average of 12% to 14%, suggests the office market slump caused by the pandemic-driven rise in remote and hybrid work is starting to recover.

Rent Trends and Market Conditions

Office asking rent, excluding concessions, rose 1.7% year-over-year to $32.47 per square foot in Q3, up from $31.92. However, inflation-adjusted rents remain near historic lows dating back to around 1988.

[translate:“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 said in an interview.

Tenant Market Favored Outside Top-Tier Buildings

Although operating costs for most corporations are increasing faster than rents, the market continues to favor tenants outside the highest-grade properties, according to Weiss.

Signs of Stabilizing Demand

Demand is showing signs of stabilizing, supported by the return-to-office trend and increased space requirements from financial services and tech firms. Two years ago, the average space per office employee bottomed out at 146 square feet; it has since risen slightly to 149 square feet.

Summary: The office leasing market shows early signs of recovery with vacancies easing and rents inching up, yet tenant-favorable conditions persist outside prime buildings amid stabilizing demand.

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CFO Dive CFO Dive — 2025-11-04

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