Office rental vacancy

In 2025, office rental vacancy rates in the United States are expected to reach 21.2%, reflecting a 0.6% increase over the previous year. Despite efforts by some companies to encourage employees to return to the office, a significant portion of the workforce remains remote following the work-related shifts that occurred during the COVID-19 pandemic. This change in work arrangements has maintained high vacancy levels, with flexible workplace policies and the construction of speculative office buildings in high-activity areas also contributing to the sustained vacancy rate. These trends dominate the office property market in 2025.

From 2020 to 2025, the office rental vacancy rate increased notably. Through 2020 and 2021, the office vacancy rate jumped up 3.5%, mainly due to the widespread adoption of remote work in response to the COVID-19 pandemic. In 2022, office vacancy rose further to 17.9%, as health concerns lingered and companies adapted to remote and hybrid work policies. The expansion of hiring for permanent remote and hybrid roles played a significant role in limiting demand for traditional office space, as a larger share of companies' workforces became permanently remote rather than temporarily remote due to the pandemic. In 2023, despite attempts by some employers to bring workers back—either by removing remote positions or incentivizing in-office attendance—a substantial proportion of employees remained remote. Consequently, the vacancy rate climbed further to 19.2% in 2023 and continued increasing, as businesses and developers adjusted slowly to shifting workplace needs. Notably, the construction of new office buildings in prime business zones increased the supply of office space, as landlords anticipated eventual demand, but these spaces often remained unleased, driving vacancy rates higher.

Technological advancements, particularly the internet's facilitation of remote work capabilities, have been a persistent theme weakening office space demand throughout the 2020 to 2025 period. Macroeconomic conditions, especially total employment and corporate profits, have traditionally influenced office space demand; however, the structural shift towards remote work has decoupled the typical inverse relationship between economic growth and vacancy rates. The growing use of global and contract labor further suppressed the need for physical office space, underscoring the changing nature of work environments during this five-year span.

Between 2020 and 2025, office rental vacancy rates experienced growth of 5.7 percentage points. The combination of post-pandemic behavioral shifts, gradual corporate policy adjustments, technology making remote work more feasible, and persistent building activity in major business districts has left vacancy rates elevated, suggesting prolonged changes in the demand for commercial office properties.