The national office vacancy rate has continued its steady increase, rising by 30 basis points to a record 21.2% in the first half of 2026. Average effective rent growth remained largely stable over the same period, increasing 0.3%. However, net absorption, which measures the change in occupied space, extended its negative trend and ended the first half of the year down 14.2 million square feet, the largest two-quarter decline since the second half of 2023.
The result is a market increasingly shaped by shrinking demand rather than new supply. With development slowing and occupied stock still contracting, the office sector’s next phase depends less on construction cycles and more on how quickly tenants settle into long-term hybrid workspace r...