U.S. Office Leasing Volume Lags Historical Norm Despite Recent Recovery

ARLINGTON, Va.--(BUSINESS WIRE)--U.S. office leasing has rebounded substantially over the past year, but demand and supply issues are making it difficult for volume to fully recover to pre-pandemic levels, according to data from CoStar, the leading global provider of online real estate marketplaces, information and analytics in the property markets.

Office tenants signed new leases for an average of 105 million square feet over the past four quarters – an improvement over the prior four-quarter period but remaining roughly 10 million square feet below the 2015-19 average.

“Earlier in the decade, many large occupiers consolidated into smaller footprints in response to post-pandemic ways of working, which may have been the dominant factor in bringing down average lease transaction sizes,” said Phil Mobley, national director of office analytics at CoStar Group. “Since then, per-worker space requirements have stabilized. However, elevated construction and financing costs have stifled construction activity, and renovations remain unusually slow, which means that major occupiers seeking to relocate to updated space have relatively few options.”..

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