NEW YORK--(BUSINESS WIRE)--Cushman & Wakefield (NYSE: CWK), a leading global commercial real estate services firm, announced today that its Q3 2026 U.S. Office MarketBeat shows continued momentum in the U.S. office market, with national vacancy declining year-over-year for the third consecutive quarter, sublease availability falling to its lowest level since 2020 and new construction remaining near historic lows.
Net absorption totaled positive 50,000 square feet (sf) during the third quarter, extending the market’s streak of positive absorption to five consecutive quarters. Over the past year, U.S. office absorption totaled positive 15.5 million square feet (msf).
National office vacancy stood at 19.8% at the close of Q3. While vacancy has remained broadly stable near 20% for the past two years, it declined 25 basis points (bps) from a year ago, marking the third consecutive quarter of year-over-year improvement. Vacancy was also lower than a year ago in 48 of the 92 U.S. markets tracked by Cushman & Wakefield, including San Francisco, Manhattan, Orange County, Charlotte, Phoenix and Dallas.
“The U.S. office market is showing increasingly consistent signs of stabilization,” said David C. Smith, Head of Americas Insights at Cushman & Wakefield. “Occupier demand continues, sublease inventory is steadily declining, and obsolete buildings are increasingly leaving the competitive inventory. While conditions vary considerably by market and asset, these trends are creating a stronger foundation for a tightening office market.”
Sublease Inventory Falls to Lowest Level Since 2020
Vacant sublease availabilities declined for the 10th consecutive quarter in Q3 and are now 33% below the Q1 2024 peak. At 89 msf, sublease inventory is at its lowest level since Q4 2020 and accounts for 1.6% of total U.S. office inventory, approaching its long-term average of 1.5%.
The decline is an important indicator for the broader office market. Historically, sublease inventory has peaked ahead of overall vacancy. Sublease availability reached its most recent peak in Q1 2024, while national vacancy reached a recent high of 20.1% in Q3 2025 and has since declined to 19.8%.
The recovery remains uneven across building classes. Vacancy among top-tier office properties has declined 215 bps over the past two years, while vacancy in Class B and C properties has continued to rise, highlighting the widening performance gap between higher-quality buildings and the broader market.
New Office Supply Approaches 30-Year Low
The national construction pipeline increased for the second consecutive quarter to 23.0 msf but remains near historic lows. Just 7.1 msf of new office space was delivered through the first three quarters of 2026, approximately one-fifth of the historical average. Based on the current pace, full year 2026 completions are on track to equal the lowest amount of new office space delivered in over 30 years.
At the same time, the existing office inventory continues to contract as competitively obsolete properties are converted to other uses, such as residential. Total U.S. office inventory has declined by 42.5 msf, or 0.8%, over the past six quarters, while more than one-third of U.S. markets have seen office inventories decline by at least 2.0% from recent peaks.
“The supply side of the office market is undergoing a significant reset,” Smith said. “New construction remains historically low while obsolete inventory continues to be removed from the market. Combined with stabilizing demand, that reduction in supply should support further improvement in office fundamentals.”
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for occupiers and investors with approximately 53,000 employees in over 350 offices and nearly 60 countries. In 2025, the firm reported revenue of $10.3 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture. For additional information, visit www.cushmanwakefield.com.