Q4 2024 U.S. office market overview

The overall availability rate for U.S. office space sat at 23.4% at the end of the fourth quarter—comprised of a 20% direct availability rate and 3.4% sublet availability rate. This quarter marks the second consecutive quarterly decline in overall availability, a trend not seen since before the pandemic in the fourth quarter of 2019.
Year-over-year availability dropped roughly 20 basis points (bps).

Quarter over quarter, direct available space decreased by 9.6 million square feet (msf) and sublet available space decreased by 7.8 msf—netting a 17.3 msf decrease in total available space. While the availability rate remained historically high, this quarterly decrease in supply is a positive indicator for the U.S. office market.

U.S. office leasing activity in 2024 reached 290 msf—sitting 11.6% behind the pre-COVID average (2000-2019) at 328 msf, and 1.5% behind 2023 at 294 msf.

However, certain markets like San Francisco, Manhattan, and Dallas are up significantly from 2023 (50%, 18%, and 11%, respectively). Additionally, the Federal Reserve’s recent interest rate cut should continue to provide a boost in the office market in the coming quarters.

Since 2019, average lease sizes across the U.S. have steadily declined, with 2024 marking a 14.7% decrease compared to 2019. This trend is primarily driven by new leases, which have shrunk by 18.6% as occupiers transition to more efficient office spaces. 

In contrast, renewal lease sizes have grown by 11.7% during the same period, though this growth has been inconsistent year over year, with the majority occurring in 2024. This uptick in renewal sizes highlights large occupiers leveraging current market conditions to secure larger spaces through renewals, hinting that the market is soon to hit recovery mode.