U.S. Office Market Outlook – August 2026

Report highlights

• The national office vacancy rate stood at 17.7 percent in July, down 130 basis points year-over-year.
• National full-service equivalent listing rates averaged $33.58 per square foot, nine cents lower from June but up 2.6% year-over-year.
• The national office construction pipeline featured 29.5 million square feet underway, representing 0.4% of existing stock.
• Office investment reached $36.4 billion as of July, with properties trading for an average of $198 per square foot.

Medical office gains share as traditional office demand softens

Demand for medical office space continued to benefit from the sector’s limited exposure to remote work adoption and favorable demographic trends, distinguishing itself from traditional workplaces. Employment in the education and health-care sectors expanded 2.4% year-over-year nationally, compared with 0.3% growth for non-farm jobs and 0.3% decline in office-using segments.

Medical office investment also highlights the sector’s resilience. Among the nearly 500 assets sold since 2024 with two transaction prices available for comparison, 67% appreciated in value. In contrast, the general office sector saw 54% of properties sold at higher values since 2024. Markets with aging populations recorded notably strong results: in Tampa, Fla., 90% of medical office buildings sold at higher prices, compared with 71% of general office.

The segment also gained a larger share of development as more than 7 million square feet of medical office space was delivered in 2025, representing 16.8% of total office completions. Additionally, medical office construction starts accounted for 26.2% of total office starts last year, substantially higher than the 11% share from 2020.

Shrinking pipeline accompanies rising investment activity

The national office vacancy rate reached 17.7% in July—130 basis points lower year-over-year. Manhattan recorded the lowest rate among major markets at 10.2%, followed by Miami’s 11.6% and Los Angeles’ 14.5%.

The national full-service equivalent listing rate stood at $33.58 per square foot as of July—nine cents lower from the previous month but 2.6% higher year-over-year. Manhattan remained the country’s most expensive market at $71.95 per square foot, followed by San Francisco at ($63.41) and Miami ($60.33).

The national office pipeline totaled 29.5 million square feet, or 0.4% of existing inventory. Boston led with 3.4 million square feet underway, followed by Manhattan (2.9 million square feet) and Dallas (2.8 million square feet).

The office investment activity totaled $36.4 billion across 1,576 transactions through July, with assets selling at an average of $198 per square foot. Manhattan led with nearly $5.2 billion in sales, followed by Dallas ($2.9 billion) and the Bay Area ($2.6 billion).

Read the full Yardi Matrix Office Market Outlook: August 2026.