{"id":218081,"date":"2025-10-16T16:01:12","date_gmt":"2025-10-16T16:01:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/218081\/"},"modified":"2025-10-16T16:01:12","modified_gmt":"2025-10-16T16:01:12","slug":"us-office-markets-enter-growth-cycle-as-vacancy-rates-decline-jll","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/218081\/","title":{"rendered":"US office markets enter growth cycle as vacancy rates decline: JLL"},"content":{"rendered":"

\"\"\/
\n Listen to the article
\n 3 min<\/p>\n

This audio is auto-generated. Please let us know if you have feedback<\/a>.<\/p>\n

The U.S. office market is bouncing back, entering a growth cycle after years of fighting vacancies, according to JLL\u2019s Q3 office market dynamics report<\/a>.\u00a0<\/p>\n

National office vacancy rates declined for the first time since early 2019, falling five basis points to 22.5% at the end of the third quarter, JLL says. Leasing activity is at 82% of pre-pandemic levels.\u00a0\u00a0<\/p>\n

Gross leasing volume grew 6.5% quarter over quarter to 52.4 million square feet, with 18 markets exceeding pre-pandemic leasing activity and seven markets returning to more than 90% of pre-pandemic levels.\u00a0<\/p>\n

The first decline in vacancies since 2019 is the result of stabilizing demand and expanding office footprints at a time when new development is minimal. \u201cOffice [markets] could be entering an extended period of declining vacancy rates,\u201d JLL says.\u00a0<\/p>\n

Footprint adjustments for large expiring leases show the completion of a pandemic-driven downsizing cycle, JLL says. Tenants with at least 25,000 square feet facing expiration have only cut 2.2% of their footprint when signing a new lease in the past year, the firm says.\u00a0\u00a0<\/p>\n

Large-scale transaction activity has returned to the market, JLL says. Leasing transactions over 100,000 square feet fell over 40% in Q2, but large leases grew by more than 50% in Q3, signalling a move toward recovery.\u00a0<\/p>\n

\u201cDiminished volumes of large leases continue to be one of the most significant drivers of the gap between leasing over the past year and pre-pandemic norms,\u201d says JLL, noting that large leases over the past year only reflect about two-thirds of pre-pandemic volume.<\/p>\n

Asking rents grew slightly in Q3 but have remained largely stagnant since mid-2023. Overall asking rents have softened due to declining availability of higher-quality spaces and relatively static availability of in lower-quality segments.\u00a0<\/p>\n

But as Tier 1 and trophy stock becomes more scarce \u2014 with new supply declining in availability and second-generation (2010-2014 construction) tightening since early 2024 \u2014 lower, Tier 2 rental rates are continuing to bubble up, growing 2.1% in the past year, JLL says.<\/p>\n

Appetite for office space, even older construction, coincides with post-pandemic highs in office attendance as flexible policies continue to fade<\/a> in favor of more stringent attendance policies, JLL says. Continued shifts have brought the majority of office-based employees from Fortune 100 companies back to the office on a full-time basis, with 56% of these companies facing five-day requirements as of October, the report says.<\/p>\n","protected":false},"excerpt":{"rendered":"Listen to the article 3 min This audio is auto-generated. Please let us know if you have feedback.…\n","protected":false},"author":2,"featured_media":218082,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,63,99,171],"class_list":["post-218081","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-au","tag-australia","tag-business","tag-markets"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/218081","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=218081"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/218081\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/218082"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=218081"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=218081"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=218081"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}