➤ Key Highlights
Office under construction fell to ~17.2M SF — lowest since 2012.
Net absorption +4.5M SF in Q1 2026 — third consecutive positive quarter.
Vacancy ticked down to 20.2%, off the mid-2025 peak of 20.5%.
76% of tenants plan to hold or expand footprints at lease expiration.
Just ~13.6M SF of completions expected in 2026.
➤ SIGNAL
Supply discipline, not demand heroics, is doing the healing.
The recovery is concentrated — Sunbelt deliveries (Dallas, Miami, San Diego) risk localized oversupply through 2028.
Office isn't booming. It's bottoming. With almost nothing new being built, even modest positive absorption starts to grind vacancy lower. That's a supply-side floor, and it's the most durable kind because it doesn't depend on tenants suddenly loving the office again.
The tenant-intent data is the under-covered part: a clear majority now plan to hold or grow their footprints at renewal. After four years of "shrink at every expiration," that shift in the renewal baseline is what actually stops the bleeding.
The risk is geographic. The little new product being built is clustering in a handful of Sunbelt metros — which can manufacture localized gluts even while the national number improves.
Implications Underwrite by submarket and vintage, not by the national vacancy headline. The floor is real but uneven; the spread between trophy and commodity office widens from here.
➤ TAKEAWAY
Office healed by building nothing — the recovery is a supply story, not a demand story.
Source: Newmark Q1 2026 office report via CRE Daily / CommercialCafe — late May 2026 · Tag: Office / Leasing
