Read the latest Yardi Matrix Office Market Outlook.
The national office vacancy rate remains on an upward trajectory, reaching 19.8 percent at the end of 2024, according to the latest Yardi Matrix U.S. office market outlook.
Report Highlights
- The national office vacancy rate reached 19.8 percent at the end of December 2024.
- This marked a 150-basis-point increase year-over-year and a 40-basis-point rise compared to the previous month.
- National full-service equivalent listing rates averaged $33.11 per square foot, marking a 26-cent increase from the prior month.
- The office construction pipeline continues to shrink further, featuring 54.7 million square feet under development as of December 2024.
Rising office vacancies highlight market disparities
The national office vacancy rate climbed to 19.8 percent by the end of December 2024, reflecting a 150-basis-point increase compared to the same period in 2023 and a 40-basis-point rise from the previous month, according to Yardi Matrix. Although vacancy rates have increased across all markets, some regions have been hit significantly harder.
Among the top 25 markets tracked by Yardi Matrix, six recorded vacancy rate hikes exceeding 500 basis points in 2024. Austin saw the most dramatic jump, with a 690-basis-point increase since December 2023, pushing its vacancy rate to 27.9 percent. The Bay Area and Portland followed, each with a rise of 620 basis points, while San Francisco and Philadelphia both climbed 520 basis points. Boston also recorded a notable increase of 510 basis points.
National full-service equivalent listing rates averaged $33.11 per square foot in December 2024, up 26 cents from the prior month and 4.5 percent year-over-year. Miami posted the highest rate at $54.37 per square foot, followed by the Bay Area at $54.13, Boston at $53.35, Austin at $45.68 and San Diego at $43.28.
2024 sees sharpest pipeline decline in a decade
The office construction pipeline continued to decline through 2024, with only 54.7 million square feet under development by year-end—just 0.8 percent of total inventory, according to Yardi Matrix. This represents a steep 43.6 percent drop from the 97 million square feet underway at the beginning of 2023. Completions were similarly muted, with only 43.2 million square feet of office space delivered in 2024, the lowest annual total since 2013.
Boston led the nation in office construction, with 8.7 million square feet underway, accounting for 3.4 percent of its total stock. San Francisco followed with 3.8 million square feet (2.3 percent of inventory), while Austin reported 3.5 million square feet (3.7 percent of inventory). San Diego had 3.1 million square feet in progress (3.1 percent of inventory), closely trailed by Dallas with 2.9 million square feet (1.0 percent). Manhattan rounded out the list, with 2.7 million square feet under construction, representing 0.6 percent of its inventory.
Read the full Yardi Matrix Office Market Outlook: January 2025.
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