Q3 2024 U.S. office market overview

As of Q3 2024, the U.S. office overall availability sits at 23.5%—a 20-basis point (bp) quarter-over-quarter drop, representing the first quarterly decrease in overall availability since Q4 2022. The U.S. has reached 175.7 million square feet (msf) of leasing activity—17.4% shy of leasing activity through Q3 2023. Despite the decrease in leasing activity, renewals are seeing a significant increase in average lease size—up 14% compared to 2019.

23.5%

overall availability rate sees first decrease since Q4 2022

Through Q3 2024, the overall availability rate for U.S. office space sits at 23.5%—comprised of a 20% direct availability rate and 3.5% sublet availability rate. This 20-basis point (bp) decrease quarter-over-quarter represents the first quarterly decrease in overall availability since Q4 2022.

Quarter over quarter, direct available space has decreased by 14.3 million square feet (msf) and sublet available space has decreased by 7.0 msf—netting a 21.3-msf quarter-over-quarter decrease in total available space. While the availability rate remains historically high, the quarterly decrease in supply is a positive indicator for the U.S. office market.

175.7 msf

U.S. office leasing activity through Q3 2024

U.S. office leasing activity has reached 175.7 msf through Q3 2024—sitting 29.4% behind the pre-COVID average (2000-2019) at 248.9 msf, and 17.4% behind this time last year at 212.6 msf. When annualized, year-end leasing activity is likely to sit around the 240 msf mark.

Certain markets like Manhattan and San Francisco, however, are up almost 30% from this time last year. Additionally, the Federal Reserve’s recent interest rate cut should provide a boost in the office market in the coming quarters.

+14%

increase in average renewal square footage vs. 2019

Across the U.S., the average office lease size has decreased by 17% from 2019 to today. This downsize is largely captained by new leases, which have dropped 22.8% in average lease size in the same period as a result of many occupiers upgrading to more efficient office space. Despite this, renewals across the U.S. have seen an increase of 14% in average lease size from 2019 to year-to-date 2024.

The growth of average renewal lease sizes signals that large occupiers are taking advantage of current market conditions and signing renewals at a higher frequency.

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