U.S. Office Market Outlook – July 2026

As of June, the national office vacancy rate reached 17.7percent.

Report highlights

• The national office vacancy rate stood at 17.7 percent in June, down 170 basis points year-over-year
• National full-service equivalent listing rates averaged $33.67 per square foot, up six cents from May but down 2.4 percent year-over-year
• The national construction pipeline featured 29.6 million square feet underway, representing 0.4 percent of existing stock
• Office investment reached $30 billion during the first half of 2026, with properties trading for an average of $195 per square foot

Conversion activity gains momentum

Historically low office values are paving the way for new opportunities for office-to-multifamily conversions. Yardi’s Conversion Feasibility Index identifies 2 billion square feet of office space as candidates for such projects, with Tier I properties considered the most suitable for multifamily conversion and accounting for 4.6 percent of that stock. Office-to-multifamily projects completed or under construction totaled 11.8 million square feet in 2025, the highest level recorded for any year.

Chicago shows how discounted sales can support adaptive reuse, as 59 percent of the deals recorded since 2024 were at a discount and has a local inventory of 95 million square feet suitable for conversion. In contrast, Seattle has 47.5 million square feet of suitable space but has recorded less activity.

The national office vacancy rate reached 17.7 percent in June—170 basis points lower year-over-year. San Francisco recorded the highest rate at 25.8 percent, followed by Seattle (24.7 percent) and Austin (24.5 percent). Portland’s vacancy remained at 22.1 percent after stagnating above 20 percent since late 2024.

The national full-service equivalent listing rate stood at $33.67 per square foot in June, up six cents from the previous month and down 2.4 percent from a year ago. Manhattan recorded the highest average listing rates at $72.02 per square foot, followed by San Francisco ($65.13 per square foot).

Office sales hit $30 billion

The country’s investment volume reached $30 billion, with properties selling at $195 per square foot on average. Manhattan led all markets with $4.3 billion in deals, followed by Dallas ($2.6 billion) and San Francisco ($2.4 billion).

San Francisco recorded the highest average sale price in the country at $609 per square foot, followed by Manhattan’s $590 per square foot.

The national pipeline comprised 29.6 million square feet as of June, representing 0.4 percent of existing stock. Boston led the country with 3.4 million square feet underway, while Manhattan and Dallas followed with 2.9 million square feet under construction each.

Read the full Yardi Matrix Office Market Outlook: July 2026