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U.S. developers are building far less office space than a year ago, with the national pipeline shrinking sharply even as a handful of markets — led by Boston and Manhattan — continue to buck the trend.
There is just over 32 million square feet of office space under construction in the U.S., down 44 percent year over year, according to Yardi Matrix’s December office market report.
From the start of 2025 through November, there were more than 13 million square feet of starts, on par with last year. Still, planned or under-construction projects make up 1.7 percent of the country’s office stock. That’s down from 3 percent last year, per Yardi.
Just three of the country’s top markets recorded increases in their office pipelines: Manhattan, up 10 percent year over year, with about 3 million square feet under construction; Los Angeles, up 6 percent with 2 million square feet underway; and Phoenix, up by 49 percent, with some 0.8 million square feet in the pipeline.
Boston has the highest amount of office square footage on the way, with an expected 4.1 million square feet. Manhattan ranked second and Dallas, third, with more than 2.6 million square feet under construction.
Boston also has the greatest share of its office stock either under construction or planned — 6.1 percent — which in recent years has been fueled by the life sciences industry. Austin followed (4.7 percent) and Miami was third (3.9 percent).
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Meanwhile, the national average listing rent for office space was $32.77 per square foot in November, essentially flat compared to the same time last year. The national vacancy rate edged down by 90 basis points year over year, falling to 18.5 percent.
Sixteen of the top 25 markets experienced drops in their office vacancy rates over the past year. Orlando’s rate rose the most among these markets, by 320 basis points, to reach 19.9 percent.
On the other end of the spectrum, Houston’s vacancy rate fell the most year over year, by 410 basis points, to 20.2 percent.