A quiet recovery is taking root in America’s office market, and some of the most promising momentum is occurring far from the country’s biggest skylines. According to Colliers’ national office report for the third quarter, cities including Nashville, Columbus, Columbia, Salt Lake City and San Diego are emerging as hidden hotspots—markets where leasing activity is strengthening, vacancies are tightening and fundamentals show signs of durable growth even as national averages remain sluggish.
In Nashville, robust leasing activity and continued in-migration have positioned the city among the nation’s top performers. Gross absorption surpassed one million square feet in the third quarter, according to Colliers, helped by expanding healthcare and tech tenants that continue to prefer urban mixed-use locations. Class A office space is leading the recovery, with newer buildings near downtown and The Gulch achieving some of the strongest rent growth in the Southeast. Analysts cite Nashville’s expanding talent pool and limited new supply as factors underpinning sustained landlord leverage through year-end.
Farther north, Columbus remains one of the Midwest’s most stable office markets. While national absorption trends have been negative for more than a year, Columbus posted positive absorption of roughly 148,000 square feet in the third quarter and saw vacancy fall to 18.2 percent from more than 19 percent three months earlier. Submarkets such as Dublin and Westerville were the strongest performers, reflecting steady suburban employment growth and a scarcity of new large-block space. Average asking rents held at $21.66 per square foot, while investment activity continued at a moderate pace, led by EOG Resources’ $28.7 million acquisition of the Smiths Mill Road campus in New Albany.
Columbia, South Carolina, also showed notable resilience. The market’s year-over-year job growth ranked fifth nationally through August at 2.7 percent, a figure that has helped drive downtown rents toward $30 per square foot for premier buildings. Class A lease rates are roughly 25 percent above pre-pandemic benchmarks, and Colliers noted that steady demand—particularly from state agencies reassessing their space needs—continues to push rates upward even as new construction remains limited. The firm expects Columbia's fundamentals to stay firm heading into 2026, bolstered by stable employment growth and minimal speculative supply.
In the Mountain West, Salt Lake City continued to draw both developers and tenants, supported by strong corporate investment and demographic growth across the Wasatch Front. While national office construction activity hit its lowest level in more than a decade, Salt Lake maintained one of the healthier pipelines relative to inventory, helping keep vacancy levels from rising further. Colliers identified the city among the “quality-driven” markets where tenant flight to prime locations has boosted both occupancy and rent performance relative to national averages.
On the West Coast, San Diego posted meaningful gains after several quarters of uneven demand. Colliers reported that leasing activity ticked higher in the third quarter, with rising interest from life sciences, defense and professional services companies. Landlords are seeing modest rent appreciation supported by limited new deliveries, and the firm expects the market’s recovery to build momentum through 2026 as sublease volumes continue to decline.
Across these emerging hubs, a consistent storyline is forming: quality space in diversified local economies is outperforming legacy inventory in markets still plagued by high vacancy. Colliers’ national data shows that nearly half of tracked U.S. markets posted positive absorption in the third quarter, and Class A assets collectively recorded three million square feet of net positive demand—the strongest quarterly total in three years. With new construction down by more than 50 percent year-over-year, limited additions to supply are allowing competitively located properties to regain their footing.
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