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

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.