US Office Real Estate Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

US Office Real Estate Market Trends and Insights

Growing Tenant Preference for Class A and Sustainable Buildings

Premium offices now serve as recruitment tools that enhance productivity, pushing occupiers to prioritize building quality over rent savings. The General Services Administration’s requirement for LEED Gold certification in new federal projects signals a market-wide baseline for quality and sustainability. Owners of certified assets realize stronger rent growth because tenants view environmental credentials as integral to corporate ESG targets. Prime urban buildings with energy-efficient systems and proximity to transit record higher occupancy and command longer lease commitments. Obsolete assets lacking these features face value erosion, reinforcing the bifurcation within the United States office real estate market.

Leasing Demand Supported by Resilient Sectors

Technology, healthcare, and finance collectively drove more than half of 2024 leasing activity, dispelling fears of structural office demand collapse. Amazon’s 141,000 sq ft Silicon Valley lease with WeWork underscores selective tech expansion in premium space. Financial institutions maintain physical footprints to satisfy regulatory and client interaction needs. Healthcare providers require specialized office layouts to integrate telehealth with in-person services, sustaining demand even as other sectors downsize. The United States office real estate market thus benefits from a resilient core of industries that continue to lease high-specification space.

Increased Adoption of Flexible and Short-Term Lease Structures

Corporate real estate heads seek agility, replacing decade-long leases with terms that include contraction and expansion clauses. In 2024, 42% of occupiers incorporated flexible space into their portfolios, a structural shift rather than a pandemic-era anomaly. Landlords offering turnkey suites and plug-and-play floors capture higher occupancy and can charge rent premiums for optionality. The trend is especially pronounced in secondary markets where tenants value flexibility to scale as local labor pools grow. This leasing innovation underpins stable cash flows for adaptable landlords across the United States office real estate market.

Infrastructure Upgrades Improving Office Accessibility

Transit investments in New York, Chicago, and Austin enhance last-mile connectivity and raise the desirability of adjacent office blocks. Accessibility is paramount in a hybrid work setting where employees commute fewer days but expect convenience when they do. Districts tied into upgraded subway stations or bus rapid transit lines post noticeably faster rent growth and absorption than car-dependent submarkets. City governments increasingly bundle office permits with mobility upgrades, aligning public and private capital to rejuvenate downtowns. These synergies reinforce location premiums in the United States office real estate market.

Elevated Vacancy Rates in Outdated and Suburban Offices

Functional obsolescence accelerates for buildings with inefficient layouts, limited technology infrastructure, or poor ESG credentials. National vacancy hit record highs in early 2025, with Class C suburban parks posting double-digit vacancy premiums over downtown Class A stock. Reduced daily commuting weakens footfall that once supported suburban retail amenities, further depressing tenant demand. Landlords face difficult investment decisions: undertake expensive upgrades or accept declining cash flows. The drag from obsolete space tempers overall growth in the United States office real estate market^{[1]Lawrence Yun, “Commercial Real Estate Market Insights January 2025,” National Association of Realtors, nar.realtor}.

Delayed Return-to-Office Trends Hindering Space Absorption

Only 17% of firms enforce attendance rules despite 80% having formal policies, keeping average physical occupancy below 50%. This “shadow vacancy” delays lease restructurings as tenants hesitate to commit to long-term footprints^{[2]Thomas Bisacquino, “Office Space Demand Forecast Q2 2025,” NAIOP Research Foundation, naiop.org}. Landlords must recalibrate revenue forecasts, stretching payback periods on capital projects. The uncertainty also weighs on investor sentiment, widening bid-ask spreads for transactions. These dynamics restrain short-term momentum within the United States office real estate market.

Segment Analysis

By Building Grade: Premium Assets Consolidate Power

Grade A buildings represented 58.1% of occupied stock in 2024, underscoring their dominance within the United States office real estate market. Prime assets posted 3.81% forecast CAGR through 2030—well above the broader market—due to a decisive flight-to-quality by tenants. Positive net absorption for Grade A space surpassed 2 million sq ft in Q1 2025, even as overall market absorption remained flat. The United States office real estate market size for Grade A assets is therefore positioned to expand faster than any other grade category over the forecast horizon.

Superior HVAC systems, touchless technologies, and wellness amenities turn premium workplaces into strategic talent-retention tools. Public-sector standards such as the GSA’s LEED Gold requirement converge with private-sector ESG targets to cement Grade A credentials as the default specification for large occupiers. Investors harness this momentum, funneling capital into trophy towers and core-plus refurbishments, while pricing discounts for secondary assets widen. Consequently, premium stock is likely to seize a larger United States office real estate market share as obsolete buildings exit competitive inventory^{[3]Robin Carnahan, “PBS Core Building Standards Memorandum February 2025,” General Services Administration, gsa.gov}.

Note: Segment shares of all individual segments available upon report purchase

By Transaction Type: Rental Dominance Sustained

Rental agreements controlled 68.7% of transaction value in 2024, affirming their preeminence in the United States office real estate market. Despite that dominance, sales transactions exhibit a stronger 3.72% CAGR through 2030 as opportunistic investors hunt value. The United States office real estate market size attached to rental contracts continues to grow steadily because corporate balance-sheet flexibility outweighs ownership allure in a volatile economic backdrop.

Large renewal deals—68 of the 100 biggest transactions in 2024—illustrate tenant preference for known buildings, upgraded amenities, and landlord concessions over relocation risk. Meanwhile, well-capitalized real estate investment trusts issue unsecured notes, such as BXP’s USD 850 million bond, to fund acquisitions during price dislocations. The coexistence of dominant rentals and accelerating sales highlights a maturing United States office real estate market where leasing and investing serve complementary strategic purposes.

By End Use: Professional Services Anchor Demand

Business Consulting & Professional Services held the largest 28.1% share in 2024, reinforcing the sector’s pivotal role in the United States office real estate market. Information Technology, the fastest-growing end-user segment, is projected to expand at a 3.95% CAGR to 2030 as tech giants selectively add premium space in innovation hubs. The United States office real estate market size attributable to professional services remains stable because these firms rely on client-facing collaboration that favors central locations.

Professional-services occupiers optimize layouts by integrating flexible meeting zones and digital collaboration suites, keeping footprints lean yet high quality. Tech firms, by contrast, consolidate secondary locations while expanding downtown hubs, as shown by Google’s pivot from One Market Plaza to 345 Spear Street. Banking, insurance, and asset-management companies maintain steady leasing tied to compliance requirements and client interactions. Together, these knowledge-based industries underpin revenue stability for landlords in the United States office real estate market.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

New York retained a commanding 24.1% share in 2024, reflecting its magnetic pull as a global finance and media capital. Twenty-four of the 100 largest office leases last year took place in Manhattan, underscoring sustained appetite for centrally located, transit-rich space even as hybrid work endures. Prime buildings near Penn Station and Grand Central secure the highest rentals because employees value short commute times and abundant neighborhood amenities. Still, elevated operating costs and tax burdens are prompting some firms to explore lower-cost alternatives, pressuring New York landlords to invest aggressively in amenities and ESG upgrades.

Texas charts the fastest 4.21% CAGR through 2030, propelled by corporate relocations to Austin, Dallas, and Houston. Advantageous tax structures, affordable housing, and deep engineering talent pools attract both financial services and technology firms seeking to scale efficiently. Infrastructure investments like Austin’s Project Connect light-rail system further boost office demand by improving access to emerging districts. As a result, the United States office real estate market in Texas is likely to close a portion of the share gap with coastal gateways over the forecast period.

California remains a heavyweight, its performance linked closely to technology sector fortunes in Silicon Valley and media expansion in Los Angeles. Although several tech companies trimmed excess suburban campuses, demand for top-tier collaboration hubs in downtown San Francisco and Sunnyvale persists. Florida leverages favorable tax policy and Miami’s status as a Latin American finance gateway to attract new investment, while Illinois capitalizes on Chicago’s logistics network and diversified economy to retain occupiers. Collectively, these dynamics point to a geographic rebalancing where Sun Belt growth complements the enduring appeal of legacy coastal centers, shaping a more polycentric United States office real estate market.