Two national pictures
CBRE's Q2 2026 US Office Market Report, published July 29, put overall office vacancy at 18.3%, down 30 basis points from the prior quarter — the largest quarterly decline since 2015. It recorded net absorption of 12.6 million square feet, nearly double the first quarter and the ninth consecutive quarter of positive demand, with trailing four-quarter absorption of 38.9 million square feet.
Cushman & Wakefield's Q2 2026 US Office MarketBeat, published July 9, reported national vacancy of 20.1%, down 10 basis points year over year, with second-quarter net absorption of -360,000 square feet and trailing four-quarter absorption of +14.3 million square feet.
A 1.8-percentage-point gap in national vacancy and an opposite sign on quarterly absorption is not an error by either firm. The two maintain different property panels, different definitions of tracked inventory, and different treatment of sublease space. They are separate series and should not be blended.
Where the data agree
Both firms show vacancy declining rather than rising, and both show positive demand over a trailing four-quarter window. After several years in which office was the distressed corner of commercial real estate, agreement on direction is the substantive finding.
CBRE reported leasing activity of 62.4 million square feet in the quarter, up 16% year over year, with trailing 12-month leasing of 243 million square feet, up 4%. Average asking rent reached $37.58 per square foot, up 2.6% year over year — the fastest pace in six years — while the spread between asking and taking rents narrowed to 10.1% from a wider gap during the downturn, against 8.6% in 2019.
A narrowing asking-to-taking spread is the more telling indicator. It measures how much landlords actually concede off list, and it compresses when landlords regain pricing power.
The supply side has stopped
CBRE put the under-construction office pipeline at 15.4 million square feet, down 87% from the Q2 2020 peak. Only 2.2 million square feet completed during the quarter, the lowest first-half level since CBRE began tracking in 1990. Cushman & Wakefield reported a larger pipeline of 19.7 million square feet — again a panel difference, but the same order of magnitude and the same story.
Analysis: the recovery in office vacancy is being driven at least as much by the absence of new supply as by demand. With almost nothing being built, even modest absorption tightens the market arithmetically.
The quality divide remains the sector's defining feature. CBRE reported prime vacancy at 12.3%, down 40 basis points, against 18.3% overall — and Midtown Manhattan prime vacancy at 2.2%. A market with 2.2% vacancy in its best space and roughly 18-20% overall is not one office market recovering; it is a shortage of top-tier space coexisting with a surplus of everything else.
What a recovering office market still has to absorb
Even on CBRE's more favourable series, 18.3% vacancy is far above pre-2020 norms, and the arithmetic of working it down is slow.
At the trailing four-quarter absorption rate of 38.9 million square feet, reducing vacancy by a further full percentage point would take several years absent demolitions or conversions. Cushman & Wakefield's series, with trailing absorption of 14.3 million square feet against 20.1% vacancy, implies a considerably longer path.
Conversion and removal are therefore doing part of the work that leasing cannot. Obsolete buildings withdrawn from inventory reduce the denominator, which lowers the vacancy rate without a single new tenant.
Analysis: the sector's improvement is real but narrow, and it rests on a supply pipeline that has effectively stopped. Should demand for prime space continue at current rates with only 15.4 million square feet under construction nationally, the shortage at the top of the market will intensify before the surplus at the bottom clears. Midtown Manhattan prime vacancy at 2.2% is what that endpoint looks like.