U.S. office leasing has rebounded substantially over the past year but remains below pre-pandemic levels, according to data from CoStar. Office tenants signed new leases for an average of 105 million square feet over the past four quarters, an improvement over the prior four-quarter period but roughly 10 million square feet below the 2015-19 average. Phil Mobley, national director of office analytics at CoStar Group, said earlier consolidation into smaller footprints may have been the dominant factor in bringing down average lease transaction sizes, while elevated construction and financing costs have stifled construction activity and kept renovations unusually slow. At the market level, San Francisco, led by a boom in AI-driven leasing by tech companies, has seen quarterly leasing volume rebound past the market's pre-pandemic level of 2% of inventory, with volume also elevated in New York, Nashville, and Miami, while Charlotte and Dallas have recently seen historically typical leasing activity. The findings are based on collected and estimated data from leases executed through the end of the third quarter and consider only new lease commitments, excluding renewals.
CoStar Group IncCoStar's own data shows office leasing rebounded but still trails pre-pandemic norms, a mixed signal for the data provider.
