- Office tenants have signed about 105 million square feet of new leases a year over the past four quarters, better than before but roughly 10 million square feet under the 2015-19 pace.
- San Francisco leads on AI-driven tech leasing, with quarterly volume above its pre-pandemic 2% of inventory, while New York, Nashville and Miami also run elevated.
- Limited new construction and slow renovations leave big occupiers few updated options, which caps how fast leasing volume can fully recover.
Office demand is climbing back, but not all the way. U.S. office leasing has improved over the past year yet remains short of its historical level, according to CoStar.
Across the last four quarters, tenants inked about 105 million square feet of new leases on average, about 10 million square feet shy of the 2015-19 mark.
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Smaller Footprints, Then Stability
Phil Mobley, who directs national office analytics at CoStar, says large occupiers shrank their footprints earlier in the decade, which dragged down average deal sizes.
Space needs per worker have since leveled off, he said.
A Supply Squeeze
High building and borrowing costs have kept new offices from rising, and renovation work is unusually slow, Mobley said.
Big tenants that want to relocate into refreshed space have few choices, which limits how much volume the market can capture.
Winners by Market
San Francisco has pushed past its pre-pandemic leasing pace of 2% of inventory a quarter, powered by AI-driven tech demand.
New York, Nashville and Miami also show high volume. Charlotte and Dallas have returned to normal levels, and the gains are spreading, as in the Manhattan office recovery beyond trophy buildings.
Why It Matters
The data shows a recovery that is real but uneven. Markets without an AI-type catalyst still struggle, like the slow leasing behind Houston office vacancy at 25.6%.
CoStar’s tally covers only new lease commitments through the third quarter and leaves out renewals, which barely move overall occupancy.
What’s Next
Watch whether the shortage of updated space nudges more tenants toward renovated or new buildings, and whether more markets get back to pre-pandemic leasing norms.
