2025 Biannual Office Market Report: Part Three

CompStak analyzed 11 major U.S. gateway office markets using lease-level data and the Columbia CompStak Rent Index. The latest data through Q4 2025 shows an office sector in the middle of a slow, uneven recovery, with sharp divergence across markets, asset classes, and tenant types. Check out the full insights in the 2025 Biannual Office Market Report.

Beneath a Modest National Recovery, Office CCRI Effective Rent Performance Diverges Widely Across Markets, Led by Dallas–Fort Worth and Boston, While San Francisco Lags

Office effective rent recovery through Q4 2025 according to the Columbia-CompStak Rent Index has varied widely across markets, even as national trends point to only a modest rebound. Dallas–Fort Worth and Boston rank as the strongest performers, combining relatively shallow downturns (declines of -3.9% and -5.7%, respectively)  with rapid recoveries and strong rent index above pre-COVID levels (+16.2% and +13.3%, respectively). Atlanta and Washington, D.C., show more balanced performance across metrics. However, some gateway markets lag, with San Francisco and the Bay Area (San Jose MSA)  remaining below pre-pandemic rent levels (-17.1% and -15.3%, respectively) and rank at the bottom overall. Manhattan stands out for a strong post-trough rebound (+28.5%) but was held back by a deeper initial decline (-12.7%)  and slower recovery timeline (18 quarters). Overall, markets that avoided steep declines and recovered quickly have outperformed those relying on late-cycle rebounds.

Beneath a Modest National Recovery, Office CCRI Effective Rent Performance Diverges Widely Across Markets, Led by Dallas–Fort Worth and Boston, While San Francisco Lags

Over 30% of Office Leases Expire by 2028, with Slight Majority Showing Embedded Rent Growth Potential

More than 32% of all office leases are set to expire between Q2 2026 and year-end 2028, representing a significant near-term rollover window.A slight majority of expiring space has positive embedded rent growth potential, with a modestly higher share in Class B (54.2%) than Class A (52.6%), based on comparing today’s market rent estimates to current in-place rents.

Across the 11 markets analyzed, most segments, particularly Class A space, show positive rent spreads for these expirations. The largest upside is concentrated in Phoenix Class A (+20.5%) and New York City Class B (+20.1%), with additional growth potential in New York City Class A, Phoenix Class B, and Dallas–Fort Worth across both Class A and B.

By contrast, San Francisco remains an outlier, with both Class A and Class B expirations still showing negative rent spreads, underscoring ongoing leasing challenges in that market.

Class A Lease Term Length on the Rebound While Class B/C Continues to Lag

Prime Class A lease terms have trended toward pre-COVID levels but have only exceeded 2019 in one of the past 24 quarters. The rest of the Class A sector has recovered more fully, surpassing pre-COVID levels for six straight quarters. Class B/C continues to lag, with lease terms still 8.5% below Q4 2019 and below that benchmark for 24 consecutive quarters, reflecting shorter deal structures and weaker demand for this space.

Meanwhile, Class B/C trends by individual market are mixed: all 11 markets are above their post-COVID lows, but only Atlanta and Philadelphia (PA/DE) exceed 2019 levels with year-over-year gains. Meanwhile, four markets, including the Bay Area and Washington, D.C., remain below 2019, declined year over year, and hit new lows in 2025, with San Francisco showing the largest decline.

Check out the 2025 Biannual Office Market Report for more.