The U.S. office sector is showing signs of recovery with the first average sale price increase since 2021, but the market remains fractured. While some regions are driving a rebound, tech-heavy cities are grappling with soaring vacancy rates, according to a recent report from CommercialCafe.
Fueled by strong performances in select metros, the national average sale price for an office building rose 6.1% in 2025 to $182 per square foot. And the national office vacancy rate fell 150 basis points from last year to 18.2% at the end of January. Despite these positive indicators, concerns linger over a modest construction pipeline, high average listing rates and a spate of discounted distressed asset sales.
Values in four of the top 25 analyzed metros have now surpassed their pre-pandemic levels: Miami office prices surged 20% compared to 2019, followed by Dallas (8.5%), Detroit (8.4%) and Orlando, Fla. (5.8%). Asset quality also informed pricing power, with Class A and A+ properties seeing a 7.5% increase from 2024 to 2025, compared to a 6.2% rise for Class B Buildings.
Despite the overall price rebound, parts of the market remain distressed. The total number of discounted office sales increased last year, highlighted by severe markdowns. For instance, suburban Chicago’s 4 Overlook Point recently sold for just $6.2 million — a 96% discount from its 2012 sale price of $148 million.
Peter Kolaczynski, director of Yardi Research, noted in the report that while national price-per-square-foot numbers rebounded, they remain “well below pre-Covid values,” adding that there is potential for prolonged distress regarding buildings that have delayed debt maturity for years.
The data highlights stark regional and industry-based divides. Manhattan recorded the lowest vacancy rate among top markets at 13.1% in January 2026 and kicked off the year with nearly $1.3 billion in closed sales.
Conversely, tech-centric metros, where remote work is more common, are facing formidable headwinds. Seattle carries the highest vacancy rate in the nation at 27%, a figure that could climb higher following Amazon’s recently confirmed plans to eliminate roughly 16,000 corporate jobs across its operations. And California’s Bay Area also maintained a stubbornly high vacancy rate of 23.1% last month.
Meanwhile, developers remain cautious. The national office supply pipeline stood at nearly 29 million square feet under construction at the start of 2026, marking a 43% year-over-year plunge from the 51 million square feet recorded in early 2025.
Overall, the national average listing rate for office space sat at $32.55 per square foot in January, down 2.5% from 2025.
