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The commercial real estate industry finally has something to celebrate.
A new report from JLL found that U.S. office recovery has reached a post-pandemic high, with its most active quarter in five years.
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JLL’s Q4 report documented 52.9 million square feet of office space leased, a volume that was 92% of pre-pandemic average and one that marked the third consecutive quarter of office leasing volume reaching a new high post-pandemic.
The market had its first quarter of positive net absorption — meaning an increase in occupied office space — since Q4 in 2021 and there was a decline in availability.
The record volume of inventory is also decreasing as more office buildings are being converted into residential dwellings and new office construction declines, as it did in 2024.
The news comes as big companies are saying goodbye to hybrid work models and increasingly mandating employees spend more — or all — of their work hours in the office.
“Based on executive sentiment and related announcements in the past year, more companies are expected to gradually establish attendance requirements or incrementally increase them until office attendance largely resembles prepandemic norms,” JLL (JLL-0.09%) said in its report.
“The fourth quarter was the culmination of a strong year of progress in stabilizing the U.S. office market, but pressures remain,” the report concluded.
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Ben Kesslen