The metamorphosis of office space occupancy is reflected in improving tenancy numbers, according to new research from CommercialCafe.
The report from the Yardi Systems platform attributes the shift in part to property owners adopting coworking spaces in response to growing demand for flexibility from today’s workforce.
“Coworking continues to carve out a successful segment of the office universe,” observed Yardi Research Director Peter Kolaczynski in the report. “As owners lean into turnkey and serviced offerings in addition to traditional lease offerings, we expect this growth pattern to rapidly accelerate.”
The national office vacancy rate averaged 17.8% in March, down 210 basis points from the prior year.
Among top metro areas, the lowest vacancy rates were recorded last month in Miami (12.5%), Manhattan (13.1%) and Tampa, Fla. (13.7%). The highest were seen in Austin, Texas (26.2%) and Seattle (24.8%), while both Detroit and San Francisco posted 23.3% vacancy rates.
The coworking trend grew from demand for flexibility following the COVID-19 pandemic. The CommercialCafe report cited Kastle’s Back-to-Work Barometer as showing physical office occupancy averaging around 55% in the past three years, with attendance ranges between 38% on low days and 66% on high days.
The analysis noted that while traditional office spaces are stable at the enterprise levels, “it’s the smaller, strategically located office spaces with abundant amenities and flexible accommodations that are more likely to serve the needs of the current workforce during today’s economic uncertainty.”
Because of that trend, “popular strategies include proposing shorter leases; offering leniency for early lease termination; adapting floor plans to create workspaces for the size and financial means of smaller tenants; and even partnering with established coworking operators to facilitate the transition to a new normal in the landscape of office work.”
CommercialCafe reported an average rate of $32.80 per square foot among national office listings last month, which is 1.8% lower than March 2025.
The most expensive listing rates were in Manhattan ($69.80), San Francisco ($62.73) and Miami ($59.10).
