The U.S. office market remains in reset mode. Vacancy is high, construction has slowed and demand continues to shift away from traditional downtown cores. Specifically, central business districts (CBDs) are bearing the brunt of the shift.

CBD vacancy averaged 19.2% in April, up 730 basis points since early 2020. While suburban (19.8%) and near-urban (20.1%) submarkets now post slightly higher vacancy rates, CBDs have seen the steepest rent declines. As highlighted in the latest CommercialEdge Office Report, listing rates in CBDs are down nearly 30% from pre-pandemic levels. In contrast, suburban rents have climbed 6.5% during the same period.

“Every market is unique and nuanced, but the overarching trend that downtowns are struggling with fewer office workers and higher vacancy is consistent across the country,” said Peter Kolaczynski, director, CommercialEdge

National office vacancy stood at 19.7% in April — down 20 basis points from March, but up 140 basis points year-over-year. Among major metros, Miami posted the lowest vacancy rate at 15.5%. At the opposite end, San Francisco hit a record 29%, followed closely by Austin, Texas, at 28.9% for a 650-basis-point increase from the prior year.

Meanwhile, asking rents averaged $33.34 per square foot in April, which was flat month-over-month, but up 5.4% from a year ago. In this case, Manhattan remains the nation’s most expensive market at $68.34 per square foot, despite a 4.1% annual decline. Similarly, tech-heavy metros — San Francisco ($64.19), Miami ($56.53) and the Bay Area ($52.40) — continue to outperform the national average.

Notably, Southern markets led rent growth during the last year: Miami posted a 15.4% increase, followed by Orlando, Fla. (13.3%); Charlotte, N.C. (11.9%); and Dallas (10.1%).

Just 2.8 MSF Broke Ground Through April, Active Pipeline Shrinks to 0.7% of Inventory

At the same time, new development continues to cool: Only 2.8 million square feet of office space broke ground through April — down from 3.2 million square feet during the same period in 2024. Nationwide, 44.6 million square feet is under construction, representing just 0.7% of total office inventory.

Four markets continue to lead in new supply: Boston (5.51 MSF); San Francisco (3.24 MSF); Austin, Texas (3.21 MSF); and Dallas (3.14 MSF). But, even in these markets, post-pandemic shifts are evident. Suburban submarkets now account for the bulk of new development, while CBD deliveries have collapsed — comprising just 8.2% of all new office inventory in 2023.

YTD Deal Volume Hits $14.2B, Average Price Rises to $191/SF

Through the first four months of 2025, $14.2 billion in office transactions closed at an average price of $191 per square foot. That’s up from $183 per square foot last month and a significant improvement compared to the same period in 2024, when $7.5 billion in deals traded at an average of $157 per foot.

Manhattan led the nation with $2.55 billion in closed volume, followed by Washington, D.C. with $1.36 billion.

Finally, the Bay Area continues to stand out for its pricing reset. Average sale prices have dropped nearly 50% from their 2021 peak, now hovering around $254 per square foot. While the region has borne the brunt of tech’s post-2022 pullback and the remote work disruption, AI-driven demand may offer a lift. To that end, Nvidia recently paid $123 million for a 10-building campus adjacent to its headquarters.

For additional insights into all key office markets in the U.S., see CommercialEdge’s original report.