The U.S. office market showed further signs of stabilization in the first quarter of 2026, with leasing activity reaching its strongest level since before the pandemic and availability rates continuing to decline across most major markets.
National office availability fell to 23.1% in Q1 2026, down from 24.8% a year earlier, according to Savills’ Q1 State of the U.S. Office Market Report. Nearly 88% of tracked markets recorded year-over-year declines, although recovery patterns still varied significantly by region.
The drop suggests that excess office supply continues to gradually normalize after years of elevated vacancies tied to remote and hybrid work changes.
Leasing Activity Reaches Post-2019 High
Office leasing totaled 61.2 million square feet during the quarter, slightly above the pre-pandemic quarterly average and the strongest performance since 2019.
The increase points to continued demand from companies reassessing long-term workplace needs, even as many employers maintain hybrid work policies.
At the same time, tenant demand remains highly selective. Companies continue concentrating leasing activity in premium office properties, widening the gap between top-tier buildings and lower-quality space.
Sublease Space Continues to Decline
Sublease availability fell 36% from its peak, signaling that businesses are shedding less excess space than in previous years.
While sublease inventory remains above pre-pandemic levels, the decline adds to broader signs that office footprints are becoming more stable after several years of downsizing and restructuring.
Investment Activity Picks Up Despite Debt Pressure
Office investment activity also increased year over year, with sales volume rising and capitalization rates showing signs of stabilization.
However, the sector still faces pressure from elevated office debt levels and a large number of upcoming loan maturities, which continue to weigh on the broader market.
The latest data suggests the office sector is entering a more stable phase, though one increasingly defined by demand for high-quality space and ongoing adjustments tied to hybrid work patterns.
