Global Office Leasing Hits 6-Year High in 2025, North American Expansion Dominates

Office Leasing Activity Reaches New Heights in 2025

Global office leasing activity in 2025 has reached its highest level since 2019, driven by significant demand in North America. According to RealtyAds, the first nine months of 2025 have shown an impressive surge in leasing activity, marking a notable recovery in the commercial real estate sector. This trend is underscored by the lowest vacancy rates observed in recent years, particularly in prime central locations. Despite this positive momentum, the U.S. construction market is experiencing a slowdown, with new groundbreakings at record lows and three-quarters of the remaining pipeline already pre-leased. This scenario indicates a growing competition for limited premium office spaces, reflecting improved investor sentiment and an increasing demand from businesses looking to secure prime locations.

North American Market Leads Global Expansion

In North America, the office market's expansion has been a significant contributor to the global surge in leasing activities. As reported by Forbes, the construction slowdown in the U.S. paired with positive occupier sentiment is expected to boost overall office leasing volume by 5% by the end of 2025. This growth trend is particularly pronounced in central business districts (CBDs), where office prices have increased by 5.1% year-over-year, outpacing suburban areas for the first time since early 2022. Such dynamics are driven by companies seeking prestigious addresses and enhanced employee environments, underscoring a shift in the market towards quality over quantity.

Global Vacancy Rates Decline, Prime Spaces Scarce

The third quarter of 2025 has shown a decline in global office vacancy rates, with prime office spaces becoming increasingly scarce. According to Commercial Observer, the moderation of office vacancy rates in certain markets is a positive sign, suggesting that the sector is stabilizing after years of volatility. While the national office vacancy rate in the U.S. climbed to 20.4% in early 2025, the demand for prime office space in key urban areas remains robust. This trend is driving up prices and fostering a competitive environment among investors and companies alike, eager to capitalize on these premium locations.

Investor Sentiment and Market Confidence on the Rise

The resurgence in office leasing activities is a clear indicator of improving investor sentiment and growing confidence in the commercial real estate market. As reported by CRE Daily, commercial property prices in the U.S. rose by 2.6% year-over-year in September 2025, reflecting heightened market momentum. The 17% increase in CRE volumes during Q3 2025 further signals a positive trajectory for the sector. This renewed investor interest is primarily driven by the potential for stable returns and the attractive prospects offered by the rebounding office market.

Challenges in Construction and Pre-Leasing Trends

Despite the positive outlook, the U.S. construction sector faces significant challenges. As highlighted by J.P. Morgan, new groundbreakings have plummeted to record lows, with substantial portions of the pipeline already pre-leased. This scarcity of new developments could lead to a supply-demand imbalance in the near future, emphasizing the importance of strategic planning for investors. The focus on pre-leased properties indicates a shift towards reliable income streams and reduced risk exposure, which could redefine investment strategies moving forward.

Future Implications for Global Office Markets

Looking ahead, the strong performance of the office leasing market in 2025 is expected to have lasting implications for the global commercial real estate landscape. The reduced availability of prime office spaces and continued demand for high-quality locations are likely to drive further price increases and intensify competition among investors. As companies continue to prioritize employee-centric environments and sustainable practices, the evolution of office spaces will necessitate innovative approaches to design and functionality. RealEstateAbroad.com analysis suggests that investors should closely monitor emerging trends and adapt their strategies to capitalize on future opportunities within this dynamic sector.