Office vacancy has risen to 19.4% for July, climbing 130 basis points year-over-year, according to a new analysis by CommercialCafe. Among the 25 largest office markets, nearly every city is feeling the effects of changing demand, with Austin and Seattle posting the highest vacancy rates at about 27%.
Austin stood out with a steep 430-basis-point jump in vacancy over the past year. Despite that rise, the city still ranks as one of the country’s most heavily utilized office markets, even after delivering 14.3 million square feet of new space since 2020—a volume difficult to absorb at pre-pandemic norms.
Across markets, asking rents and construction activity reflected similar geographic divides. Nationally, the average listing rate reached $32.72 per square foot in July, up 3.3% from a year earlier. Manhattan tenants continued to pay roughly double that figure, while Midwestern markets remained the most affordable. On the supply side, about 40 million square feet of office space was under construction nationwide. Boston led with 5.6 million square feet underway, and Manhattan logged the sharpest month-to-month increase, with its pipeline rising from 1.56 million square feet in June to 2.57 million square feet in July.
Developers in Manhattan are pressing ahead with projects such as Related Cos. and Oxford Properties’ 1.1-million-square-foot tower at 70 Hudson Yards and BXP’s 930,000-square-foot project at 343 Madison Ave., which will stand out in what CommercialCafe describes as a “slow supply pipeline.”
The investment picture also revealed shifts across several cities. Nationally, office sales hit $25 billion in the first half of 2025, up $8.7 billion from the same period in 2024. By July, year-to-date sales reached nearly $27 billion, averaging $182 per square foot. The Bay Area recorded about $3.4 billion in deals that month, just ahead of Washington, D.C., at $3.3 billion. Phoenix marked a notable exception, registering its first increase in average sales price per square foot in more than three years, climbing from $165 in 2024 to $197 in 2025.
Employment data further underscored the uneven experience across U.S. cities. Office-using sectors gained 41,000 jobs nationwide—a modest 0.1% increase in the year ending in July. But only 12 of the top 25 office markets posted job growth in June. Charlotte led with nearly 3% growth, boosted by corporate relocations in professional and business services. Seattle and Orlando also stood out with strong office-using employment gains.
The report painted a picture of shared pressures across these markets—weak demand, elevated interest rates and a wave of loan maturities—all combining to push down office values. That reset, while painful in many cities, may open the door to more opportunistic investors and less costly property conversions.
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