U.S. Office Market Outlook: What Q2 2026 Shows

Editor's update, October 7, 2026: This report replaces the earlier outlook with linked primary research and clearly dated observations. Unsupported capital-market statistics, individual distressed-sale claims and predictions about Federal Reserve policy have been removed. The original publication date is preserved. The figures below describe Q2 2026, not current October conditions.

The useful question for an office owner is whether an improving national market translates into demand for the particular building they own. A national vacancy rate can establish context. It cannot establish a property's likely lease-up schedule, achievable rent or refinancing terms.

The measured change in Q2

CBRE's Q2 2026 U.S. Office Market Report, published July 29, records:

• 12.6 million square feet of positive net absorption, the ninth consecutive positive quarter.
• 62.4 million square feet of leasing activity, up 16% from Q2 2025.
• 18.3% overall vacancy, compared with 12.3% for prime space.
• 15.4 million square feet under construction, down 87% from the Q2 2020 peak.

The distinction between leasing and absorption matters. Leasing measures transaction activity; net absorption measures the change in occupied space. More signed leases do not automatically represent an equivalent increase in occupied inventory.

The six-percentage-point gap between overall and prime vacancy is also a warning against applying a market average to every building. Before comparing a property with prime space, identify what qualifies it for that peer group: location, condition, amenities, floor plates and the tenant requirements it can meet.

Forecasts are a separate category

In its 2026 midyear office outlook, CBRE forecasts year-end vacancy of 18% and annual net absorption of 37 million square feet. These are expectations, not completed results. The outlook also describes demand spilling into non-prime buildings in some markets as prime availability tightens.

Our reading is that any recovery assumption needs an explicit path from the tenant pool to the property. A forecast that supports a national recovery narrative does not answer whether local tenants want a specific layout, can afford the required rent or will fund a relocation.

A property-level evidence checklist

A credible underwriting file should make the connection between market context and property cash flow inspectable:

1. Define the comparison set. Use the property's actual submarket and competitive buildings. Record the research date and whether the provider reports vacancy, availability or sublease space.
2. Separate quoted rent from achieved economics. Document concessions, tenant improvements, commissions and lease term. An asking-rent comparison alone leaves significant cash-flow assumptions unresolved.
3. Show the rollover schedule. Identify which leases expire, which tenants have extension options and what evidence supports each renewal assumption.
4. Budget the work before the revenue. Connect improvements, leasing expenses and downtime to the periods when cash must be available.
5. Keep financing assumptions dated. Use lender terms or a stated scenario. Do not assume a central-bank forecast will translate directly into a property's borrowing cost.

These are editorial diligence questions, rather than a claim that the cited market reports validate any particular purchase or loan. A property may face a different outcome from its metro or national average.

What would change this outlook

The next useful update is a comparable quarter of leasing, absorption, vacancy and supply data using the same definitions. At the property level, signed leases, actual tenant commitments and a documented capital plan provide stronger evidence than a broad recovery label.

Readers interested in how teams organize the work behind those decisions can read Eglae Recchia's contributed perspective on AI and underwriting capacity. That article discloses its company affiliation and the limitations of its supplied case-study results.

Primary sources and scope

• CBRE, Q2 2026 U.S. Office Market Report, July 29, 2026.
• CBRE, U.S. Real Estate Market Outlook Midyear Review 2026: Office.

This update uses CBRE's definitions and coverage. It does not merge differently defined broker datasets or claim independent verification of individual building performance. Corrections and additional primary documentation can be sent to contact@crenewstoday.com.