The national office vacancy rate stood at 19.4 percent in May, reflecting persistent challenges in the sector, according to the latest Yardi Matrix U.S. office market outlook.
Read the latest Yardi Matrix Office Market Outlook.
Report Highlights
- The national office vacancy rate clocked in at 19.4 percent at the end of May, a 30-basis point decrease from the previous month.
- National full-service equivalent listing rates averaged $33.15 per square foot, a 19-cent decrease from the month prior but up 4.8 percent year-over-year.
- The office construction pipeline continued to shrink, featuring 41.5 million square feet under development as of May.
- Transaction activity totaled $19.6 billion year-to-date in May.
- On average, office assets traded at $194 per square foot.
Seven metros top 23 percent vacancy rate
The national office vacancy rate reached 19.4 percent at May’s close—30 basis points lower than in April, but 160 basis points higher than during the same time last year. Vacancy rates are likely to remain elevated due to stagnant office utilization and sluggish growth in office-related jobs.
Metros with the largest shares of vacant office space included San Francisco (28.4 percent), Austin (26.7 percent), Seattle (25.8 percent), the Bay Area (25.0 percent), Detroit (24.0 percent), Denver (23.6 percent) and Dallas (23.5 percent).
Nationwide, full-service equivalent listing rates averaged $33.15 per square foot in May. This reflects a 19-cent decline from the month before, but a 4.8 percent increase compared to the same period last year. Yardi Matrix data shows Manhattan recorded the highest average at $68.08 per square foot, with San Francisco close behind at $63.01, followed by Miami at $57.71 and the Bay Area at $52.92.
2025 office starts lag 2024 pace
In May, the national office construction pipeline totaled 41.5 million square feet—just 0.6 percent of total inventory, according to Yardi Matrix. Development activity continued to slow in 2025, with only 4.2 million square feet breaking ground in the first five months of the year, a sharp decline from the 11.3 million square feet delivered during the same period in 2024.
Boston has had the nation’s largest office supply pipeline by square footage in recent years, primarily driven by the life science sector. The metro topped the list with close to 5.9 million square feet under construction, amounting to 2.3 percent of its office stock. Dallas had 3.2 million square feet of office space underway, equivalent to 1.1 percent of its total stock. Austin rounded up the top three with 2.7 million underway, or 2.8 percent of its stock.
During the first five month of the year, total office sales reached $19.6 billion, with properties trading at an average of $194 per square foot. Manhattan led investment volume at $2.8 billion, followed by Washington, D.C., at $2.5 billion and the Bay Area with $2.1 billion.
Read the full Yardi Matrix Office Market Report: June 2025.
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