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North American office vacancies fall as tenant demand returns

U.S. office has seen a four-quarter turnaround totaling 29.7 million square feet, and total office inventories declined in the U.S. and Canada for the first time on record.

Reported · Written up by our desk · Commercial

North American office markets posted their strongest performance since the COVID-19 lockdown, with vacancy declines reported across Canada and the United States in the second quarter for the first time since 2019, according to Lee & Associates.

Connect Commercial Real Estate, citing its 2026 Q2 North American Market Report, said tenant growth has returned and institutional investors are showing greater confidence in premium assets.

The firm also attributed the shift to limited new office construction and more obsolete properties being redeveloped, which helped drive a combined decline in total office inventories in the U.S. and Canada for the first time on record.

In the U.S., the turnaround over the past four quarters totaled 29.7 million square feet. In Canada, year-to-date net absorption is 4.4 million square feet, with the year on track to surpass 2019’s 5.4 million square feet, while some metros such as New York City and Dallas are surging and others including Los Angeles and Chicago still seek stability.

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