At a glance
- Newmark’s quarterly report tracks leases of 10,000 square feet or more across 62 U.S. markets.
- The quarter was the sixth consecutive with positive net office absorption, Newmark found.
- For office allocators, the report shifts the near-term question from whether tenants are shrinking to how much space they renew as the remaining 42% of pre-pandemic leases roll.
U.S. office leasing totaled 62 million square feet in the third quarter of 2026, up 18% from a year earlier but still 21% below pre-pandemic quarterly averages, according to Newmark data reported by Commercial Observer. Newmark’s quarterly report tracks leases of 10,000 square feet or more across 62 U.S. markets.
The quarter was the sixth consecutive with positive net office absorption, Newmark found. The national construction pipeline was 20.3 million square feet, a 15-year low, and vacancy fell 50 basis points to 19.8%, still near historic highs. Sublease availability dropped 21% from a year earlier.
For office allocators, the report shifts the near-term question from whether tenants are shrinking to how much space they renew as the remaining 42% of pre-pandemic leases roll. Exposure is highest in Chicago at 53% and New York City at 50%, according to the report. The figures show a two-track market: Class A and trophy assets face limited new supply, while commodity buildings still carry leasing risk.
A majority of pre-pandemic leases have now expired in gateway markets, the report said. Downsizing has moderated, said Jessica Morin, Newmark’s head of national occupier research. “People are cutting by less space than they did earlier in the pandemic, where you saw people slash their portfolio and their square footage by 30 to 40 percent,” Morin said. “Now it’s looking closer to like 10 to 20 percent.”
Demand remains concentrated in higher-quality buildings in gateway and Sun Belt markets, and some tenants are trading up as old leases expire, according to the report. Class A net absorption year-to-date was 9.5 million square feet, exceeding trophy’s 7.2 million square feet. Occupancy losses for Class B and C office space narrowed to 1.3 million square feet year-to-date, and occupancy stabilized even as employment among office users was flat.
Markets with negative absorption, like Boston, are still improving, Morin said. With only 20.3 million square feet under construction, new supply is unlikely to disrupt the lease-by-lease clearing in the near term.
Only top-tier office absorbed space this year
Space gained or lost year-to-date by building tier, million sq ft
- Above zero
- Below zero
- Class A+9.5 M sq ft
- Trophy+7.2 M sq ft
- Class B/C−1.3 M sq ft
Show as table
| Label | Value (M sq ft) |
|---|---|
| Class A | +9.5 M sq ft |
| Trophy | +7.2 M sq ft |
| Class B/C | −1.3 M sq ft |
Reported by the Sectors desk from Commercial Observer and Newmark Q3 2026 U.S. office report. Published . Corrections