ARLINGTON, Va.--(BUSINESS WIRE)--Aug 7, 2026--
U.S. office vacancy is expected to remain steady through 2026 before beginning a gradual decline, according to a revised forecast from CoStar, the leading global provider of online real estate marketplaces, information and analytics in the property markets.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260807085309/en/
National office vacancy continued to retreat in the second quarter of 2026, dropping slightly below 14% and shifting 30 basis points below its mid-2025 record peak. Between July 2025 and June 2026, office suppliers occupied 17 million square feet of net new space, which was only the second sustained period of positive net absorption since 2020.
Net absorption is expected to be 13 million square feet in 2026 and five million square feet in 2027, a downgrade from the previous forecast, which anticipated annual net absorption of 17 million square feet and six million square feet, respectively.
“U.S. office inventory decreased by seven million square feet over the past year, driven by both historically low deliveries and surging demolitions,” said Phil Mobley, national director of office analytics at CoStar Group. “The overall pipeline has been at about 50 million square feet for more than a year, matching the previous low from 2011. As a result of this supply contraction, which is expected to be a feature of the market for at least a few more quarters, the national office vacancy rate is expected to decline, albeit at a slow pace.”
“Risks to the outlook appear weighted to the downside,” said Mobley. “Recent productivity gains in knowledge work are evident, and advances in AI capabilities and adoption could accelerate them. There is upside risk as well. Occupiers in the aggregate have been investing in workplace space without increasing hiring. They could continue to do so, taking on more space per worker.”
The full forecast can be found here.
For more information about the company and its products and services, please visit costargroup.com.
About CoStar Group
CoStar Group (NASDAQ: CSGP) is a global leader in commercial real estate information, analytics, online marketplaces, and 3D digital twin technology. Founded in 1986, CoStar Group is dedicated to digitizing the world’s real estate, empowering all people to discover properties, insights, and connections that improve their businesses and lives.
CoStar Group’s major brands include CoStar, a leading global provider of commercial real estate data, analytics, and news; LoopNet, the most trafficked commercial real estate marketplace; Apartments.com, the leading platform for apartment rentals; Homes.com, the fastest-growing residential real estate marketplace; and Domain, one of Australia’s leading property marketplaces. CoStar Group’s industry-leading brands also include Matterport, a leading spatial data company whose platform turns buildings into data to make every space more valuable and accessible; STR, a global leader in hospitality data and benchmarking; Ten-X, an online platform for commercial real estate auctions and negotiated bids; and OnTheMarket, a leading residential property portal in the United Kingdom.
CoStar Group’s websites attracted over 118 million average monthly unique visitors in the second quarter of 2026, serving clients around the world. Headquartered in Arlington, Virginia, CoStar Group is committed to transforming the real estate industry through innovative technology and comprehensive market intelligence. From time to time, we plan to utilize our corporate website as a channel of distribution for material company information. For more information, visit CoStarGroup.com.
This news release includes "forward-looking statements” including, without limitation, statements regarding CoStar's expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that revised forecasted U.S. office vacancy rates do not decline slowly due to a supply contraction as forecast. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2025 and Forms 10-Q for the quarterly periods ended March 31, 2026, June 30, 2026, and September 30, 2025, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website ( www.sec.gov ). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Forecast: Supply-side adaptation to bring down office vacancy
Republican Sen. Lisa Murkowski said Friday she will oppose Todd Blanche’s nomination as attorney general, narrowing the confirmation path for President Donald Trump’s pick to lead the Justice Department.
The Alaska senator said she’s concerned the Trump administration could proceed with its proposed $1.8 billion fund to compensate Jan. 6 rioters even though Blanche has issued a formal order terminating it.
Meanwhile, Trump said Thursday he was signing two executive actions on immigration: one limiting the number of people eligible for U.S. citizenship after being born in the United States and the other focused on stopping people from coming to the U.S. to give birth. It’s a sign that even after Trump’s first attempt at limiting birthright citizenship was rejected by the Supreme Court, he’s ready to try again.
Here's the latest:
Any concession would be tough for the Republican president, who’s insisted there’s no truth to his sagging poll numbers, the sluggish economy and the U.S. military’s dwindling stockpiles of key weapons following the Iran war he launched with Israel more than five months ago.
“He divides the world into winners and losers, and this would make him a loser,” said Eliot Cohen, who served as counselor of the State Department in the George W. Bush administration. “And the image of being a loser, I think, would be intolerable for him.”
The sticking point has been over control of the Strait of Hormuz, through which 20% of the world’s oil normally flows. While both sides say a deal is close, the Trump administration has ruled out any arrangement that would cement Iran’s grip over the waterway, including Tehran charging fees.
But Iran has insisted on some measure of control, saying the strait will not go back to being an open international waterway as it was before the war.
▶ Read more
The president praised House Speaker Mike Johnson, a stalwart Trump loyalist, and said he should be the Republican leader even if the GOP loses its narrow majority.
“He’s great. We work together great,” Trump told Punchbowl News. Sometimes, the president mused, “we’re one heart attack away from losing the House in Congress,” yet Johnson has still delivered major pieces of Trump’s agenda.
“I don’t think there’s even a thought of anybody challenging him,” Trump insisted.
Trump wasn’t so effusive about Senate Majority Leader John Thune.
“I don’t want to get into that. It’s early,” Trump said when asked whether he’d support Thune’s reelection as leader.
Trump said he gets along with the South Dakota senator but lamented the leader’s opposition to scrapping the filibuster and the Senate’s inability to pass the president’s proposals to expand federal power over elections.
“It’s a shame he doesn’t have the votes,” Trump said.
The president’s job approval rating of 33%, according to the latest AP-NORC polling, is as low as it has been in his second presidency — the kind of numbers that hurt a president’s party in midterm elections. But Trump insisted to Punchbowl News that he isn’t the real target of voter frustration, especially among Republicans.
“They’re not angry at me, but they are angry at Republicans” on Capitol Hill, he said.
He cited voter turnout in presidential elections, alluding to analyses that show he’s attracted sporadic voters and flipped some historically Democratic-leaning voters.
“The question is, will they vote? Because a lot of them are very angry at Republicans to be honest with you,” Trump said.
The president maintained that Republicans can hold their House and Senate majorities this November. But his overall argument was clear: If they don’t, it’s not his fault.
And Labor Department revisions shaved 103,000 jobs off payrolls in May and June. But the unemployment rate dipped to 4.1% as Americans left the job market.
The June jobs numbers from the Labor Department on Friday marked a sharp reversal for the American labor market.
Hiring had rebounded this year from a lackluster 2025 in the face of the conflict in the Persian Gulf that has sent energy prices surging and put a strain on family budgets. Job growth had been solid, if unspectacular. Some businesses are having trouble filling vacancies. Others are using technology to do the work humans used to do.
▶ Read more
The Republican president is sitting on hundreds of millions of dollars in campaign money but told Punchbowl News in an interview released Friday that he’ll unleash the funds to help GOP candidates ahead of the November midterms.
Trump says he has as much as $800 million to spend.
“I control it,” he emphasized.
Notably, he did not offer any details about when or where he’ll distribute the campaign cash.
Many Republicans have been counting on Trump’s super PAC being a key part of the GOP’s defense of their House and Senate majorities. The president’s political funds are a key part of Republicans’ overall financial advantage in the midterm campaign, despite individual Democratic Senate and House candidates outraising their Republican opponents in many key races across the country.
The president told Punchbowl News he’ll leave his acting attorney general at the Justice Department even if his nomination fails.
“It’ll be very sad,” Trump said, but, “we’ll all survive. Todd will survive.”
Trump called Blanche “fair” and said he’s “not a radical flamethrower.” But he acknowledged the political realities.
He singled out Sen. Murkowski as one of his Republican critics but said he has no regrets about his relationship with the Alaska Republican or other GOP senators, including Louisiana’s Bill Cassidy, who could now determine whether Blanche is confirmed.
“You do what you have to do,” Trump said. “Just so you understand, they voted to impeach me. ... In all fairness, you think that I’m going to support somebody that voted to impeach me?”
Cassidy and Murkowski were among the Republicans who voted to convict Trump on impeachment charges in 2021 after the Jan. 6 Capitol riot.
The Alaska Republican announced on social media that she’ll vote against confirming the acting attorney general for the permanent job.
Murkowski complimented Blanche personally after private meetings with him but said she’s concerned he cannot lead an independent Justice Department under President Donald Trump.
“The country needs an Attorney General who will check the worst impulses of this administration,” she said. “I hope Mr. Blanche is able to achieve that, if confirmed, but I simply do not have confidence that will be the case.”
Murkowski’s decision puts Blanche’s nomination on the brink of failing in a chamber where Republicans hold a 53-47 majority. She joins Republican Sen. Susan Collins of Maine in opposition, and Sen. Mitch McConnell of Kentucky has missed Senate votes since early June because of health problems.
That leaves Sen. Bill Cassidy as the potentially deciding vote given that all Democrats are expected to vote against Blanche.
President Donald Trump speaks in the Oval Office of the White House, Thursday, Aug. 6, 2026, in Washington. (AP Photo/Alex Brandon)
President Donald Trump speaks with a reporter as he departs after an event for Olympic athletes, coaches, staff, and representatives from Team USA in the East Room of the White House, Thursday, Aug. 6, 2026, in Washington. (AP Photo/Alex Brandon)
