Read the latest Yardi Matrix Office Market Outlook.
The average sale price fell 11 percent year-over-year to $174 per square foot, according to the latest Yardi Matrix U.S. office market outlook.
Report Highlights
- The national office vacancy rate reached 19.7 percent at the end of January.
- This represented an 180-basis-point increase year-over-year and a 10-basis-point drop compared to the previous month.
- National full-service equivalent listing rates averaged $33.38 per square foot, a 27-cent increase from December 2024.
- The office construction pipeline further wanes, featuring 50.7 million square feet under development as of January.
- Office investment totaled $41 billion in 2024, with office properties trading at an average of $174 per square foot.
Office vacancies climb, asking rates hold steady
At the end of January, the national office vacancy rate stood at 19.7 percent, rising 180 basis points from the previous year but edging down 10 basis points month-over-month. According to Yardi Matrix, vacancies have steadily climbed in recent years, driven by the persistence of remote and hybrid work. Some of the highest rates were recorded in San Francisco (29.3 percent), Austin (27.8 percent), the Bay Area (26.3 percent), and San Diego (20.6 percent).
Meanwhile, full-service equivalent listing rates averaged $33.38 per square foot nationally, up 27 cents from the previous month and 5.8 percent year-over-year. Manhattan remained the most expensive office market, with an average listing rate of $68.24 per square foot, followed by Miami at $56.91 per square foot.
Office development slows as sales struggle
The office construction pipeline totaled 50.7 million square feet in January, representing just 0.7 percent of total inventory, according to Yardi Matrix. Office completions continued their downward trend in 2024, with 44.1 million square feet delivered nationwide—the fourth straight year of decline. New development remained sluggish, with only 9.1 million square feet breaking ground over the past year.
Boston led all markets with 7.3 million square feet of office space under construction, accounting for 2.8 percent of its total inventory. Austin followed with 3.6 million square feet (3.7 percent of stock), while San Francisco had 3.5 million square feet underway (2.1 percent). San Diego reported 3.1 million square feet in development (3.2 percent), and Dallas rounded out the top five with 2.8 million square feet (1.0 percent).
In 2024, office sales reached $41 billion, with properties trading at an average of $174 per square foot. Sales volume rose by $3.2 billion year-over-year, though prices dropped by $22. Since 2019, annual sales volume has fallen by $82 billion, while prices have declined by $103.
Read the full Yardi Matrix Office Market Outlook: February 2025.
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