Vacancy rates have steadily risen across the U.S. since 2019, but are notably lower in assets built since 2015

March 22, 2023
  • Elena Lanning
  • As tenants recalibrate headcounts and formalize hybrid work policies, shrinking office footprints – combined with new construction deliveries – have driven vacancy rates higher across the country.

  • Despite the overall market softening, demand for high-quality space remains strong, which is driving a significant performance disparity between newly constructed offices and older inventory.

  • Assets built since 2015 have vacancy rates 270 bps below the Class A national average and are commanding record-high rents.

  • An abrupt slowdown in new construction should drive an even wider bifurcation in market performance based on building vintage, as first-generation space becomes increasingly elusive to tenants and landlords in this segment maintain pricing power.