Cushman & Wakefield: U.S. Office Recovery Broadens as Vacancy Declines Across More Than Half of U.S. Markets

NEW YORK--(BUSINESS WIRE)--Cushman & Wakefield (NYSE: CWK), a leading global commercial real estate services firm, today released its Q2 2026 U.S. Office Marketbeat, showing the strongest evidence yet that the office recovery is broadening across the country. National vacancy declined year-over-year for the second quarter in a row, demand reached its highest level in six years on a four-quarter rolling basis and improving fundamentals extended across more than half of the 92 U.S. office markets tracked by the firm.

Although net absorption totaled a modest negative 360,000 square feet (sf) during the second quarter, upward revisions to prior quarters pushed the four-quarter rolling total to a positive 14.3 million square feet (msf), marking the seventh consecutive quarter of improvement and the strongest level since 2020.

National office vacancy declined 10 basis points (bps) year-over-year to 20.1%, marking the eighth straight quarter in which vacancy remained largely flat. Overall vacancy fell both quarter-over-quarter and year-over-year in 49 of the 92 U.S. markets tracked by Cushman & Wakefield Research, signaling that improving market conditions are extending well beyond a handful of gateway cities. San Francisco, Orange County and Midtown Manhattan recorded the largest annual vacancy declines.

"The first half of 2026 reinforced that the office recovery is no longer confined to a handful of leading markets or trophy assets," said David C. Smith, Head of Americas Insights at Cushman & Wakefield. "Demand has improved for seven consecutive quarters, vacancy is beginning to decline across more than half of the markets we track, and the amount of available sublease space continues to shrink. While the recovery remains gradual, the underlying fundamentals are moving in the right direction across a much broader segment of the U.S. office market."

The improving outlook is also reflected in sublease availability, which has steadily declined for more than two years. Vacant sublease space fell 15.4% year-over-year to 95.6 msf, now sitting 28% below its Q1 2024 peak and returning to levels last seen in early 2021. Available sublease space now represents 1.8% of total U.S. office inventory, continuing a trend that historically precedes broader improvements in occupancy fundamentals.

At the same time, new supply remains historically constrained. Office completions declined 24% year-over-year during the quarter, reducing the four-quarter rolling total to 15.6 msf, the lowest level since 2012. The national construction pipeline totaled just 19.7 msf, or approximately 0.4% of total inventory, with only four U.S. markets maintaining development pipelines exceeding 2% of existing inventory.

Meanwhile, the nation's office inventory continues to contract as obsolete properties are converted or repositioned for alternative uses. Total U.S. office inventory has declined by 0.6%, or 33 msf, over the past five quarters, with 20 markets shrinking by at least 1% during the past year. The combination of declining inventory, limited new construction and steadily improving tenant demand is contributing to firmer market fundamentals nationwide.

"Looking ahead, we expect constrained new supply and a smaller inventory base to continue supporting gradual improvement across the office sector," Smith said. "Occupiers remain disciplined in their leasing decisions, but the market is increasingly benefiting from healthier supply-demand dynamics that should support continued recovery through the balance of 2026."

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for occupiers and investors with approximately 53,000 employees in over 350 offices and nearly 60 countries. In 2025, the firm reported revenue of $10.3 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture. For additional information, visit www.cushmanwakefield.com.