One highlight from this month’s Office Report from CommercialCafe reveals that Phoenix saw its first increase in sales price per square foot in more than three years. 

Vacancy rates remained above the national average of 19.4% in most of the Western U.S. markets we surveyed. In July, the highest vacancy rate in the region was in Washington state, where 27% of office space in Seattle was unoccupied. San Francisco was not far behind, however, as data showed a little more than 26% of office space in the market was vacant last month.   

Key Takeaways

  • The national office vacancy rate was close to 19.4% in July, following an increase of nearly 130 basis points year-over-year.
  • The national office listing rate averaged $32.72 per square foot in July, which marked a 3.3% increase from the previous year.
  • With a little more than 40 million square feet of office space currently under construction, the office supply pipeline remained modest at the start of August.
  • The Bay Area topped the list for YTD sales through July in terms of dollar volume (roughly $3.4 billion), followed closely by Washington, D.C. ($3.3 billion).
  • Austin, Texas, and Seattle contended for the highest vacancy rate in July, each at around 27%.
  • Office asking rates in Manhattan, N.Y., were roughly double the national average, while Midwestern markets remained among the most affordable.
  • Boston remains the most active market in terms of pipeline with nearly 5.6 million square feet of new office space under construction.

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Office Sales Pick Up Y-o-Y, Phoenix Sees Long-Awaited Price Growth

During the first half of 2025, office sales totaled $25 billion, which was an $8.7 billion increase from the first half of 2024. Then, year-to-date sales in July reached nearly $27 billion with office properties changing hands for an average of $182 per square foot.

The Bay Area; Washington, D.C.; and Manhattan, N.Y., topped the list of markets for year-to-date sales totals in July. Among the top U.S. markets we analyzed for this report, they were also the only ones to surpass $3 billion in office properties traded since the start of the year.

It’s worth noting that Phoenix saw its first increase in sales price per square foot in more than three years: The average sale price of an office property here went from $165 per square foot in 2024 to $197 in 2025. Based on the 34 properties sold for a published transaction amount and with a history of two or more sales, only seven traded at a discount to their previous sale price. And, in terms of year-to-date transactions, sales only totaled $487 million to place Phoenix in the middle of the pack for the year.

Austin, Texas, Remains Among Top Office Markets, Despite Sustained Hike in Vacancy

The national average full-service equivalent listing rate for office space was $32.72 per square foot in July, which marked an increase of 3.3% year-over-year (Y-o-Y). Meanwhile, the national vacancy rate inched up 130 basis points (bps) over the previous year to reach 19.4% last month.

Zooming in on Austin, Texas, vacancy rates increased 430 bps in the last 12 months. At the same time, office space in Austin was more than 27% vacant in July as the effect of new supply and the shift toward hybrid and remote work outweighed the market’s relatively strong utilization and solid employment growth in recent years.

Granted, the Texas market added 14.3 million square feet of new space (nearly 15% of stock) since 2020 — an expansion that would have been difficult to absorb even with the office utilization levels prior to the start of the decade. However, despite physical office occupancy that’s still significantly below pre-pandemic levels, available office utilization metrics all show Austin as a top market.