Office sale prices continued to decline in 2024, according to the latest CommercialEdge report, reflecting ongoing uncertainty in the sector amid entrenched remote and hybrid work trends.
The average sale price fell 11 percent year-over-year to $174 per square foot, following a steeper 24 percent drop in 2023. Since 2019, office values have plunged 37 percent.
High-end properties and those in central business districts (CBDs) saw the sharpest declines, with A and A+ buildings losing 22 percent of their value in 2024, while B-rated properties slipped just 3 percent. CBD office prices plummeted 28 percent, while suburban and urban submarket properties fell 15 and 24 percent, respectively.
Distressed sales surged, with nearly 600 buildings—over a third of all office transactions—selling at a discount. More than a third traded for less than half their previous price. As the sector evolves, CommercialEdge expects that the gap between resilient and struggling assets to widen.
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The national office vacancy rate reached 19.7 percent at the end of January, up 180 basis points year-over-year but down 10 basis points from the previous month. Vacancy rates have steadily risen in recent years as remote and hybrid work remain widespread. Some of the highest vacancies were recorded in San Francisco (29.3 percent), Austin (27.8 percent), the Bay Area (26.3 percent) and San Diego (20.6 percent).
In January, national full-service equivalent listing rates averaged $33.38 per square foot, marking a 27-cent increase from the prior month and a 5.8 percent rise year-over-year. According to CommercialEdge, Manhattan posted the highest listing rate at $68.24 square foot, followed by Miami at $56.91 per square foot.
Office-using employment dipped in January, shedding 2,000 jobs, yet still reflecting a modest 40-basis-point annual growth, bringing the total to 35 million. The professional and business services sector lost 11,000 jobs, while financial activities and information sectors saw gains of 7,000 and 2,000 jobs, respectively.
Over the past year, office employment contracted by 0.1 percent to 34.7 million, a net loss of 35,000 jobs. Professional and business services saw the steepest drop, down 69,000 positions, followed by a 21,000-job decline in the information sector. Financial services, however, added 55,000 jobs.
Office development slows as sales struggle to rebound
The office construction pipeline featured 50.7 million square feet in January—equivalent to just 0.7 percent of total inventory, according to CommercialEdge data. In 2024, 44.1 million square feet of office space was delivered nationwide, marking the fourth consecutive year of annual declines. Meanwhile, new construction remained sluggish, with just 9.1 million square feet breaking ground over the past year.
Boston led the nation with 7.3 million square feet of office space under construction, accounting for 2.8 percent of its total inventory. Austin followed with 3.6 million square feet (3.7 percent of stock), while San Francisco had 3.5 million square feet underway (2.1 percent). San Diego reported 3.1 million square feet in development (3.2 percent), and Dallas rounded out the top five with 2.8 million square feet (1.0 percent of its inventory).
Meanwhile, office sales totaled $41 billion in 2024, with office properties trading at an average of $174 per square foot. Year-over-year, sales volume increased by $3.2 billion, while prices declined by $22. Since 2019, annual sales volume has dropped by $82 billion, with prices falling by $103.
Read the full CommercialEdge office report.