The Office Market Has Found Its Footing, and the Best Space Is Running Out

After five years of being written off, the American office is back on the leasing calendar. Third-quarter data shows net absorption positive for a tenth straight quarter, vacancy falling, new construction at record lows and annual leasing volume on pace to beat the record set in 2022. The recovery is not evenly distributed, but for commercial property owners, investors and corporate occupiers, the post-pandemic question has shifted from whether companies will come back to what kind of space they will fight over when they do.

Leasing is heading for a record year

CBRE's Q3 2026 U.S. Office Market Report found that leasing activity rose 4% year over year to 63.8 million square feet, putting 2026 on track to surpass the 2022 annual record of 238 million square feet. Overall vacancy fell to 18.2%, asking rents rose 3.1%, and construction completions stayed at record lows, which means the supply overhang that defined the past several years is finally being absorbed rather than added to. CBRE forecasts office investment volume will rise 10% in 2026 to $91.1 billion, with private and institutional investors increasing their office holdings since 2023.

The composition of demand is changing too. Stefan Weiss, head of U.S. office research at CBRE, told reporters that new leases made up 61% of year-to-date activity, up from 56% in 2025, a shift toward expansion after years of renewal-heavy deals. Prime office vacancy fell to 11.9%, and CBRE's annual occupier survey found 89% of employers now expect at least three days a week in the office.

Badge swipes confirm the trend

The attendance data points the same way. Kastle Systems' 10-city Back to Work Barometer, built on keycard and mobile credential data, showed weekly office occupancy at 54.7% of its early-2020 baseline in late September, with Tuesday peaks at 65.3% and Class A+ buildings averaging 76.1% for the week and 94% on peak days. Dallas led the country at 66.3%. Kastle's barometer hit a post-pandemic record of 56.3% in December 2025, and the pattern since has been stable attendance concentrated in the best buildings. Placer.ai's Office Index found office visits in August 2026 were 32.5% below August 2019, the smallest August gap since the pandemic.

The numbers behind the recovery

• 10: consecutive quarters of positive U.S. office net absorption (CBRE Research, Q3 2026)
• 63.8 million sq. ft.: Q3 leasing activity, up 4% year over year, with 2026 on pace to beat the 2022 record (CBRE Research)
• 18.2%: U.S. office vacancy in Q3, with prime vacancy at 11.9% (CBRE Research)
• 61%: share of 2026 leasing from new leases rather than renewals, up from 56% in 2025 (CBRE Research)
• 54.7%: 10-city weekly office occupancy in late September, with Dallas highest at 66.3% (Kastle Systems)
• $91.1 billion: forecast 2026 U.S. office investment volume, up 10% (CBRE Research)

What the recovery looks like inside a global services firm

The companies that advise, lease, manage and operate commercial buildings see this shift in their own books. Dallas-based CBRE Group, the world's largest commercial real estate services firm, reported third-quarter revenue of $11.5 billion on October 22, up 13% year over year, with core earnings per share up 28% to $2.05. Facilities management revenue rose 13% in local currency, with double-digit growth in the enterprise business led by technology, financial services and energy clients, the corporate occupiers now committing to larger, better-run footprints. Property management revenue rose 8%.

The firm's growth also shows where the next wave of commercial real estate demand is forming. On a trailing twelve-month basis, CBRE's infrastructure services revenue rose 50% to $4.5 billion, driven in part by its Critical Infrastructure Services business serving data centers and other mission-critical facilities. Chair and CEO Bob Sulentic said the company continued to advance that business line alongside the broader infrastructure services work it performs across the firm. The signal for owners and investors is that the same firms steering tenants back into offices are also building the capacity to run the AI-era facilities that sit alongside them. Assets under management ended the quarter above $155 billion.

What owners, investors and occupiers should do now

The recovery rewards quality. With prime vacancy under 12% and Class A+ buildings running near full on peak days, the gap between the best space and the rest is widening, and it will keep widening while construction stays at record lows. Owners of well-located, amenitized buildings have pricing power for the first time in years. Occupiers planning expansions should move before 2027, when the current leasing pace and thin pipeline tighten options further. Investors reading the 10-quarter absorption streak as a trend rather than a blip are already back in the market, and the volume data suggests they will have company.

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