Adaptive-Reuse Conversion Projects on the Rise, Tackling Stubbornly High Office Vacancy Levels


Adaptive-Reuse Conversion Projects on the Rise, Tackling Stubbornly High Office Vacancy Levels
Key Takeaways: In June, the national office vacancy rate was 17.7% following a decrease of 170 basis points (bps) year-over-year (Y-o-Y). The national office listing rate averaged $33.67 per square foot last month, which was 2.4% lower than values recorded in June 2025. Nationally, the modest office supply pipeline inched up to nearly 29.6 million square feet of office space under construction last month. With more than $4.3 billion in deals closed since the start of the year, Manhattan, N.Y., topped the list for sales. It was followed by Dallas ($2.6 billion) and San Francisco ($2.4 billion). Among the eight large U.S. office markets where vacancy was below the national average, Manhattan, N.Y., and Miami averaged the lowest vacancy rates in June. Western and Northeastern U.S. markets had most of the leasing rates that were above the national average, while Southern and Midwestern markets had some of the most affordable office asking rates in June. Boston; Manhattan, N.Y.; and Dallas had the most active construction pipelines and were still the only markets where more than 2 million square feet of new office space was in development last month. ...more RSK: On note, the Midwest has some of the more reasonable office asking rates....really?
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Key Takeaways:

In June, the national office vacancy rate was 17.7% following a decrease of 170 basis points (bps) year-over-year (Y-o-Y).
The national office listing rate averaged $33.67 per square foot last month, which was 2.4% lower than values recorded in June 2025.
Nationally, the modest office supply pipeline inched up to nearly 29.6 million square feet of office space under construction last month.
With more than $4.3 billion in deals closed since the start of the year, Manhattan, N.Y., topped the list for sales. It was followed by Dallas ($2.6 billion) and San Francisco ($2.4 billion).
Among the eight large U.S. office markets where vacancy was below the national average, Manhattan, N.Y., and Miami averaged the lowest vacancy rates in June.
Western and Northeastern U.S. markets had most of the leasing rates that were above the national average, while Southern and Midwestern markets had some of the most affordable office asking rates in June.
Boston; Manhattan, N.Y.; and Dallas had the most active construction pipelines and were still the only markets where more than 2 million square feet of new office space was in development last month.