Office Supply Pipeline Shrinks; Coworking Gains Market Share
The U.S. office supply pipeline continued to contract in 2025, with planned or active projects accounting for just 1.7% of the national inventory—down significantly from 3% a year earlier, according to data reported by CommercialCafe. Despite the construction slowdown, Manhattan and San Francisco have emerged as notable exceptions, showing encouraging signs of growth.
Coworking spaces have also seen a continued upward trend, solidifying their position within the evolving office market. In 2025, 22 million square feet of coworking space was delivered across the country—a 16% increase compared to 2024. This expansion pushed coworking’s total market share past 2%, with a 30-basis-point gain.
“While New York City is leading the office comeback and the AI sector is driving recent demand in San Francisco and the Bay Area, office recovery elsewhere has been nuanced and varies greatly city by city and even building by building,” said Peter Kolaczynski, Director at Yardi Research. “Though we are seeing localized winners, the overarching challenge remains the lower physical occupancy rate compared to pre-COVID numbers.”
Pictured: An Industrious coworking space in San Francisco.
