Net Decline in US Office Space as Deliveries Slow & Conversions Accelerate

The U.S. office space market is set for a net decline as new construction deliveries slow and conversions of existing buildings accelerate, according to a report from JLL released Thursday. Less than five million square feet of new offices broke ground in the U.S year to date, while 14.7 million square feet has been removed for conversion into other uses due to converging valuations between office assets and multifamily assets as well as shifting incentive and regulatory structures in major cities that make adaptive reuse more attractive financially or reduce barriers associated with it . Although 85 million square feet of office space is under construction for delivery in the coming years, JLL forecasted that new construction deliveries will begin to decline “precipitously” from 2025 through 2027 leading to supply constraints which could drive demand into secondary tiers of quality among occupiers .