2026 Vacancy Update

National office fundamentals continued to strengthen in the first quarter of 2026, reflecting a steady, data-supported recovery. According to Yardi Matrix, national vacancy ended March at 17.7 percent, down from 18.2 percent in January, representing a 46-basis-point decline over the quarter.

February marked the most pronounced improvement, with vacancy falling 57 basis points month-over-month to 17.6 percent before inching up slightly by 11 basis points in March. Despite the modest uptick at quarter-end, vacancy remained firmly below the 18 percent threshold—an important historical benchmark for the sector.

The broader context underscores the significance of these first-quarter gains. Vacancy declined for 11 consecutive months between April 2025 and February 2026, highlighting a sustained improvement rather than episodic movement. January’s decline and February’s sharper compression point to stronger absorption early in the year, while March’s stabilization suggests the market is beginning to find balance rather than losing momentum.

Year-over-year compression signals firmer market conditions

Year-over-year, national office vacancy fell 2.1 percent, from 19.9 percent in March 2025. This represents one of the most meaningful annual improvements seen since vacancy peaked near 20 percent in early 2025. Throughout last year, vacancy consistently trended lower—from 19.7 percent in April to 18.4 percent by December—setting the stage for further compression in early 2026.

Importantly, this improvement occurred with limited volatility. Monthly changes throughout 2025 were generally modest, ranging from 3 to 36 basis points, reinforcing the view that the recovery has been driven by underlying fundamentals rather than short-term shifts.

Overall, the first quarter of 2026 marks a clear transition into a lower vacancy range. With vacancy holding in the mid- to high-17 percent range and year-over-year compression exceeding 200 basis points, office fundamentals appear increasingly stable, supported by restrained new supply and gradually improving occupier demand.

—Posted on April 27, 2026