CBRE: Office Market Stabilizes Amid Rising Demand, Limited New Supply

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CBRE, Dallas, reported positive net office absorption for the eighth consecutive quarter in early 2026, as moderate demand growth outpaced virtually no new supply.

“Stabilizing fundamentals and improving liquidity have led to more normal levels of office investment activity” CBRE said in its new U.S. Office Market Report. “Leasing activity increased by 0.2% compared with Q1 2025 and is expected to exceed 2019 levels for the year.”

The under-construction office pipeline ticked up slightly during the quarter to 15.8 million square feet. But that figure remains down by 87% from the peak in the second quarter of 2020. “The slight uptick in the first quarter was primarily due to a large new construction start in Midtown Manhattan,” CBRE noted. “[But] construction completions totaling 1.3 million square feet were the lowest quarterly total since CBRE began tracking this metric in 1990.”

The report said average asking rents increased by 2.2% year-over-year during the quarter, the fastest pace in six years and slightly above the trailing 30-year average.

The sector’s “flight to quality” continues, as the vacancy rate for prime office space was 5.9 percentage points below the overall office vacancy rate in early 2026.