U.S. office projections have been slightly upgraded in a revised forecast from CoStar, the leading global provider of online real estate marketplaces, information and analytics in the property markets.
Amid a performance shift in the third quarter of 2025, the near-term U.S. office outlook now calls for 10 million square feet of positive absorption over the next four quarters, an upgrade from the previous forecast, which anticipated a negative absorption of 4 million square feet.
Rent growth is also expected to achieve better results, reaching 1% by late 2026 and 1.5% by mid-2027. The previous forecast noted the metric would likely remain below 1% well into 2027.
“The revised forecast accounts for the strongest quarter of occupancy gains since 2019, despite stagnant job growth in traditional knowledge industries,” said Phil Mobley, national director of office analytics at CoStar Group. “Many occupiers, anticipating higher office attendance, have recently committed to additional space despite tepid hiring. This behavior is expected to boost absorption for several more quarters.”
In the longer term, per-employee space needs are expected to be lower than before 2020, presenting a headwind to future demand. Thus, vacancy is expected to be structurally higher, remaining above 13.5% through the end of the decade. This would be a full percentage point above the peak that followed the Great Recession.
“While the current outlook is positive, there are downside risks,” said Mobley. “Persistent inflation and volatile trade policy suggest that economic growth is still poised precariously. Furthermore, preliminary benchmark revisions to employment data indicate that the job market has been even weaker over the last year than initially reported, especially in key knowledge industries, where a focus on tech-enabled efficiency could further erode payrolls.”
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