Office vacancies notch first post-pandemic annual drop: CBRE

Office Vacancies Show First Annual Drop Since Pandemic

According to CBRE’s Stefan Weiss, average asking office rents have risen but remain at their lowest inflation-adjusted level since the late 1980s. The office vacancy rate, although still well above the long-term average of 12% to 14%, shows improvement, suggesting the office market slump triggered by remote and hybrid work during the pandemic may be easing.

The impact of this shift is visible in rents. Office taking rent, excluding concessions, increased by 1.7% year-over-year to $32.47 per square foot annually in Q3, up from $31.92. Despite this rise, inflation-adjusted asking rents remain at a historic low.

“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.

Weiss pointed out that corporate costs are rising faster than rents, keeping the market advantageous for tenants, especially outside top-tier buildings. There are also signs that demand is stabilizing, partly due to the return-to-office efforts and increased demand for larger spaces from financial services and tech firms.

Two years ago, the average office space per employee hit a low of 146 square feet and has since risen slightly to 149 square feet.

Summary: The office market is showing early signs of recovery with improving vacancy rates and rising rents, but corporate costs keep the market tenant-friendly outside prime spaces.

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CFO Dive CFO Dive — 2025-11-04

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