U.S. office sales are regaining momentum, construction is ticking upward, and coworking continues to carve out a larger share of the market โ even as vacancy rates remain elevated across many metros.
According to CommercialCafe, year-to-date office sales hit $38 billion through September 2025, outpacing the same period in 2022. Despite lingering concerns about long-term demand, investors and tenants are still targeting modern, amenitized office spaces in top-tier locations, fueling transactions and leasing activity in select markets.
Construction Starts Rise as Developers Bet on Smaller, Higher-End Projects
After hitting a 10-year low in completions in 2024, office development is slowly rebounding. By September 2025, the U.S. had seen 11.9 million square feet of new office construction starts, nearly matching all of 2024โs total of 12.1 million square feet.
But the focus has shifted. Rather than massive towers, developers are leaning into โjewel boxโ projects โ smaller, high-end buildings with a strong mix of amenities. Despite high vacancy rates, projects are moving forward in markets like DallasโFort Worth, which started over 1 million square feet of office development in 2025 alone, even with vacancy above 20%.
Vacancy Down Nationally, But Western and Southern Markets Still Struggle
National office vacancy sat at 18.6% in September, down 80 basis points year-over-year. Miami had the lowest vacancy of all major markets at just under 13%, while Seattle and Austin topped the high end with vacancy rates around 27%.
Meanwhile, San Francisco remains the most expensive leasing market at over $64 per square foot, nearly double the national average of $32.79. In contrast, Detroit offered the most affordable space among major markets, with rents under $22 per square foot.
Seattle, Manhattan Lead in Office Sale Prices
Nationally, office properties changed hands for an average of $195 per square foot this year. But several markets far outpaced that:
- Manhattan led the country with an average of $530 per square foot, thanks to over $5.5 billion in year-to-date sales.
- Seattle hit $258 per square foot, marking its most expensive quarter since early 2022.
- In the West, the Bay Area topped regional sale prices at $392 per square foot.
Coworking Quietly Expanding Amid Push for Flexibility
Coworking is slowly expanding its footprint as businesses continue to prioritize flexibility. Both startups and major corporations are turning to coworking as a cost-effective alternative to long-term leases โ and a way to support hybrid work models without excess space.
Operators are likely to see continued growth opportunities as demand increases for plug-and-play offices that offer shorter commitments and modern amenities.
