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U.S. office leasing hit a post-pandemic high in the fourth quarter of 2025, led by return-to-office momentum and large transactions that have surged as companies commit to long-term workplace strategies, according to a JLL Q4 report released Friday.
Almost all, or 97%, of Fortune 100 employees are subject to hybrid or full-time in-office requirements, leading to an average in-office attendance of four days a week and helping large-scale transactions rise about 15% year over year, the report says.
Shifting federal government attendance policies at the beginning of 2025 also have helped as public sector workplace policies align more closely with the private sector, “bringing a major uplift to daily office foot traffic in major federal government enclaves,” JLL said.
This normalization of attendance policies, in conjunction with aggressive post-pandemic rightsizing, has meant many major companies — JP Morgan and Amazon, among them — need expansion space, the firm says.
Annual leasing volume was up 5.2% year over year to 207 million square feet, with 55.1 million square feet in leasing transactions in Q4, a post-pandemic high, the report says.
Meanwhile, the supply of office space is hitting record lows with little relief in sight as inventory under construction dropped 20% below historic lows. Total vacancies at the end of the year sat at 22.2%.
Large markets are outperforming secondary markets, which are still working through post-pandemic recovery. Gateway markets grew 15% year over year, compared to 3.5% for secondary markets and 3.3% for tertiary markets.
“Consistent with leasing activity, the leading markets for occupancy gains in 2025 were dominated by coastal gateways and mid-sized Sun Belt secondary cities,” JLL said. New York and the San Francisco peninsula increased inventory 2.6%, followed by Silicon Valley at 1.3% and Phoenix at 1%.
In addition, market consolidation and more aggressive attendance policies are restoring the relationship between the physical location of talent and the companies’ workforces. That’s benefited gateway market