CoStar Projects Stable U.S. Office Vacancy Through 2026

U.S. office vacancy projections remain virtually unchanged in a revised forecast from CoStar, the leading global provider of online real estate marketplaces, information and analytics in the property markets.

After reaching a cyclical peak in mid-2025 before lowering slightly by the end of the year, the near-term U.S. office outlook now anticipates stable vacancy (14.1%) through the end of 2026, followed by a gradual decline that would bring the headline rate near 13% by 2030.

“The revised forecast outlook takes a somewhat more optimistic long-term view than the previous forecast, which called for a continued rise in vacancy until late 2026, remaining well above 13% through the end of the decade,” said Phil Mobley, national director of office analytics at CoStar Group. “The shift reflects recovering tenant demand during the back half of 2025, driven by a stabilization in per-worker space needs even as hiring in the traditional knowledge industries continued to lag.”

Compared with prior expectations, the revised house view forecast calls for roughly 10 million fewer square feet of occupancy gains in 2026 as job growth continues to decelerate. On the supply side, the near-term outlook is similar, with about two-thirds of the remaining under-construction pipeline set to deliver this year.

Rent growth is expected to hold steady throughout 2026, though it will likely remain below 1% until an acceleration in early 2027 that coincides with the expected pickup in job growth.

“Risks to the outlook remain balanced,” said Mobley. “Some occupiers may need to expand footprints simply to accommodate workers attending more consistently, even without strong new hiring. On the other hand, the recent productivity-driven divergence between economic growth and job growth could persist, especially if advances in AI enable firms to expand output with fewer employees. That could dampen demand for additional space.”

The full forecast can be found here.

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