As of January 2026, the national office vacancy rate stood at 18.2 percent in January, representing a 150-basis-point year-over-year drop.
Read the latest Yardi Matrix Office Market Outlook.
Report Highlights
- The national office vacancy rate stood at 18.2 percent in January—150 basis points lower over the past 12 months.
- The national full-service equivalent listing rate was $32.55 per square foot as of January—down 31 cents from the previous month.
- The sector’s office pipeline included roughly 29 million square feet, accounting for 0.4 percent of existing stock.
- Office investment volume reached $4 billion during the first month of the year, with office properties selling at an average sale price of $278 per square foot.
Vacancy continues improvement
As of January, the national office vacancy rate fell at 18.2 percent—150 basis points lower year-over-year and 20 basis points from the previous month. Despite notable decreases in vacancies, there are still several metros with elevated levels, especially tech-heavy markets. Among the top 25 U.S. markets, Seattle recorded the highest January rate at 27 percent. Austin (26.4 percent) and San Francisco (24.7 percent) followed. Manhattan posted the lowest rate nationwide, at 13.1 percent in January, followed by Miami (13.9 percent).
Markets with notable vacancy improvements include San Francisco (-460 basis points), Houston (-380 basis points) and Manhattan (-350 basis points), on a year-over-year basis. On the other hand, the highest increases were recorded in Orlando (290 basis points).
The national full-service equivalent listing rate stood at $32.55 per square foot in January 2026—down 31 cents from the previous month and 2.5 percent year-over-year. Manhattan remained the leader for office rents, at $67.36 per square foot, followed by San Francisco’s $63.84 per square foot. Detroit’s $21.68 per square foot kept it as the metro with the lowest average rents in the U.S.
Development stays muted
The sector’s under construction pipeline consisted of 29 million square feet in January—accounting for 0.4 percent of existing stock and marking a 42.9 percent drop year-over-year. For context, there were 50.7 million square feet underway during the same month from 2025.
Boston remained the top metro for office development, with 4.1 million square feet underway. Manhattan and Dallas followed, with 2.8 million square feet and 2.5 million square feet, respectively.
Boston remained the metro with the largest pipeline, with 4.4 million square feet underway. Manhattan followed with 2.3 million square feet. In contrast, the smallest pipeline was in Twin Cities, where only 230,121 square feet were under construction.
Developers will likely continue to pull back on new projects, as construction activity hit a historic low. There were only 13.8 million square feet that broke ground over the past 12 months, signaling a muted pace as the sector continues to struggle. President Trump’s nomination of Kevin Warsh to succeed Jerome Powell as the chairman of the Federal Reserve may provide a shift in construction financing conditions. Warsh is expected to align with the administration’s preference for lower interest rates.
The office investment volume hit $4 billion in the first month of 2026, with office properties selling at an average sale price of $278 per square foot. There were 121 transactions closed nationwide in January.
Office pricing finally turned a corner in 2025. The average sale price recorded a 6.1 percent increase last year—the first increase since 2021 and finally reached the bottom at $182 per square foot. Even with this rebound, office pricing still remained 32.7 percent below pre-Covid values.
Following a strong performance in 2025, Manhattan stood out once again. The metro recorded $1.3 billion in sales in January—highest dollar volume nationwide—while assets sold for $760 per square foot.
Last year, the metro registered 73 transactions, marking the highest sales number of the decade, while properties sold at $495 per square foot—21.5 percent higher year-over-year.
Read the full Yardi Matrix Office Market Report: February 2026.
Add Comment