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Key Takeaways
US office vacancy declined in 49 of 92 major markets during Q2 2026, marking the second straight quarter of improvement, according to Cushman & Wakefield.
Office inventory continues shrinking as conversions remove obsolete buildings, tightening supply despite modest net absorption.
The recovery is spreading beyond a handful of gateway markets, suggesting healthier leasing fundamentals across the broader office sector.
Commercial office fundamentals strengthened again during the second quarter, extending a recovery that is reaching more markets across the US.
According to Cushman & Wakefield, national office vacancy fell 10 basis points during Q2 2026, with 49 of the 92 markets it tracks reporting lower vacancy rates. The gains come despite ongoing economic uncertainty and point to a broader recovery fueled by steady leasing demand and a shrinking supply of older office space.
Office Recovery Broadens
The latest data suggests the office rebound is no longer limited to a few trophy buildings or coastal gateway markets. Cushman & Wakefield says vacancy has now declined for two consecutive quarters as tenants continue favoring high-quality properties. As premier space becomes scarcer, demand has started spilling into other Class A buildings. At the same time, obsolete offices continue leaving the inventory through redevelopment, helping improve market balance. David Smith, Cushman’s head of Americas insights, said the first half of 2026 demonstrated that office recovery has expanded beyond a small group of leading markets.
The Details
National vacancy declined 10 basis points during the quarter, while total office inventory contracted by 33M SF over the past five quarters. Cushman reports that roughly 90,000 apartments remain in the office-to-residential conversion pipeline, reducing available office supply in many cities. Twenty markets have removed at least 1% of their office inventory through conversions or other redevelopment efforts.
Leasing remains strongest in technology-driven markets. San Francisco, Orange County, and Midtown Manhattan posted the largest year-over-year vacancy improvements. Several secondary markets also ranked among the strongest performers, including Kansas City, Charlotte, Jacksonville, and Austin. San Francisco recorded a 364-basis-point occupancy gain, although its overall vacancy rate remains elevated at 30%.
Read More: US Office Vacancy Drops Across Most Major US Markets
