Published on Wednesday, May 6, 2026
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The market's recovery continues unevenly across metros as future supply clusters in both gateway and Sun Belt cities.
The office market has continued its gradual stabilization in March 2026, with the national vacancy rate falling to 17.8%, down 210 basis points year-over-year, according to Yardi Matrix.
Vacancy rates continue to diverge sharply across major markets. Austin remains the highest-vacancy large metro at 26.3%, despite a 230-basis-point year-over-year decline tied to easing supply pressures. At the lower end, Miami posted a 12.5% vacancy rate, followed by Manhattan at 13.1%. San Francisco recorded the greatest improvement nationally, with vacancy falling 540 basis points over the past year.
The national full-service equivalent listing rate averaged $32.80 per square foot in March, down 1.8% year-over-year. Manhattan led pricing at $69.80 per square foot, followed by San Francisco at $62.73 per square foot.
Development activity remains historically constrained, with the office pipeline totaling 29 million square feet or 0.4% of total stock. Completions reached 4.3 million square feet as of March, reflecting continued restraint in new deliveries.
Construction remains concentrated in a handful of markets. In absolute terms, Boston leads with 3.87 million square feet underway, followed by Manhattan at 2.92 million square feet and Dallas at 2.29 million square feet. Los Angeles (2.05 million) and San Diego (1.68 million) round out the top tier, with additional activity in New Jersey, Austin, Houston, Miami and Denver.
Relative to existing stock, intensity tells a different story. San Diego leads at 1.7% of inventory under construction, followed by Boston at 1.5%. Miami (1.1%) and Austin (1%) also rank high, with mid-tier exposure in Dallas (0.8%), Los Angeles and Nashville (0.7% each) and Manhattan and New Jersey (0.6% each).
Forward-looking supply pressures broaden further when planned development is included. Boston tops the list at 4.2% of stock, followed by Miami at 3.4% and Austin at 3.1%. Dallas stands at 2.7%, while Manhattan, San Francisco and Atlanta each register 2.4%. San Diego follows at 2.2%, with Los Angeles and Nashville at 1.9%.
Investment activity remains selective but active in core markets. Total office investment volume reached $12.8 billion in the first quarter, with assets trading at an average of $220 per square foot. Manhattan led all markets with $1.8 billion in transactions at $707 per square foot, while San Francisco recorded the highest pricing at $868 per square foot despite lower volume.