Navigating the Office Market Reset: How Market Conditions Create Opportunity for Tenants
by King White, on Jul 15, 2025 7:15:00 AM
As the U.S. office market emerges from pandemic disruption, corporate occupiers face a historically high vacancy environment, sluggish job growth, and shifting economic policies. Site Selection Group (SSG), through its exclusive focus on tenant-only representation, delivers the unconflicted guidance that organizations need to turn uncertainty into opportunity. This report analyzes the latest trends and reveals why now, more than ever, tenants benefit from conflict-free advocacy.
Market overview: A shaky but stabilizing recovery
- Vacancy Rates: The national office vacancy rate remains at 14% in 2025, nearly five percentage points higher than in 2019.
- Positive Absorption: Momentum is improving in major metropolitan areas like New York, where attendance is nearing 95% of pre-pandemic levels.
- Uneven Performance: Only half of the major office markets show positive demand trends.
- Market Insight: With transaction sizes 15% below historic norms and cautious expansion underway, real estate decisions must be sharp and strategic.
U.S. Office Vacancy Rate (2020–2025)
Year |
Vacancy Rate (%) |
| 2020 | 10.2 |
| 2021 | 12.8 |
| 2022 | 13.6 |
| 2023 | 13.8 |
| 2024 | 14 |
| 2025 | 14 |
Rents and incentives: Minimal growth, maximum opportunity
- Asking Rents: Flatlining at $36/SF, up just $1 from 2020 despite 25% CPI inflation.
- Concessions: Tenant improvement (TI) allowances have increased by 50%. Free rent is commonly offered at one month per lease year.
- Market Insight: SSG helps clients navigate the competitive mix of pre-built suites, Class A premiums, and repositioned assets.
Market Asking Rent Growth (2020–2025)
Year |
Rent Growth (%) |
| 2020 | 0.5 |
| 2021 | -0.3 |
| 2022 | 0.2 |
| 2023 | 0.5 |
| 2024 | 0.8 |
| 2025 | 0.9 |
Construction pipeline: Supply contraction creates strategic timing
- Under Construction: 67.7 million SF nationally — the lowest since 2012.
- Future Deliveries: Forecasts show less than 50 million SF/year through 2029.
- Asset Types: Only ~30% of pipeline targets traditional office space; the rest is medical, biotech, or owner-occupied.
- Market Insight: This shrinking pipeline enhances tenant leverage, provided it is guided by unbiased representation.
Office Space Under Construction (2020–2025)
Year |
Under Construction (Million SF) |
| 2020 | 100 |
| 2021 | 90 |
| 2022 | 85 |
| 2023 | 80 |
| 2024 | 70 |
| 2025 | 67.7 |
Investment market: Price discovery still underway
- Asset Repricing: Office values have decreased by 45-50% since their peak.
- Cap Rates: Investment-grade deals typically reflect cap rates of 8-10%.
- Buyer Profile: Owner-users and private equity dominate amid institutional pullback.
- Market Insight: SSG’s market insight helps tenants understand landlord motivations and use them to their advantage.
Strategic value of tenant-only representation
- No Conflicts of Interest: We never represent landlords.
- Data-Driven Leverage: Real-time analytics shape every deal.
- Custom Strategies: Portfolio optimization aligned to workforce realities.
- True Advocacy: Every decision, every negotiation, for the tenant alone.
- Market Insight: Landlords have brokers. You should, too, but one who only works for you.
Conclusion
In an environment this nuanced, conflict-free tenant representation is not just a benefit—it’s a necessity. SSG delivers the expertise, advocacy, and transparency tenants need to succeed in today’s evolving office market.
