Q2 2024 U.S. office market overview

As of Q2 2024, the overall availability rate for U.S. office space has begun to stabilize—now at 23.7%. This figure is comprised of a 20% direct availability rate and a 3.7% sublet availability rate, and remains nearly unchanged from Q1 2024. Despite supply remaining stable, demand has seen an uptick in recent quarters. The 124.3 million square feet (msf) of leasing activity through the first half of 2024 marks a 13.2% decrease from this time last year; however, this quarter’s leasing activity at 72.1 msf shows a 38.1% increase over last quarter, shining a positive light into the second half of 2024.

23.7%

overall availability rate stabilizes across the U.S.

At the midway point of 2024, the overall availability rate for U.S. office space sits at 23.7%—comprised of a 20% direct availability rate and 3.7% sublet availability rate. The total figure remains nearly unchanged from Q1 2024 but marks a year-over-year increase of 40 basis points (bps). Total available space has seen consistent incremental quarter-over-quarter increases since Q2 2023, and now appears to be heading toward stabilization. While the availability rate remains historically high, the slowdown in supply growth is a welcome sign for the future of the U.S. office market.

52.2 msf

of U.S. office leasing activity through the first half of 2024

Through Q2 2024, U.S. office leasing activity has reached 124.3 million square feet (msf)—sitting 25.4% shy of the pre-COVID average (2000-2019) at 166.6 msf, and 13.2% below the first half of 2023 at 143.2 msf. However, the 72.1 msf of leasing activity this quarter represents a 38.1% increase over last quarter, providing positive momentum going into the second half of the year. As return-to-work efforts continue toward reaching an equilibrium, office occupiers’ understanding of their space needs will solidify and present a clearer picture on what to expect for future U.S. office leasing activity.

26.3%

average value of concessions as a share of U.S. lease terms

When looking at office concession packages as a share of total rent paid throughout the term of the lease, the year-to-date average across U.S. gateway markets sits at 26.3%. This means that a tenant paying $100 per square foot (psf) will, on average, receive $26 psf of concessions per year in the form of free rent and tenant improvement allowances. Concession packages across the U.S. office market have been inflated since the onset of the pandemic in 2020 and have continued to grow every year since then—currently up 8.9% from 2023.

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