Office Vacancy Fell, Asset Values Sank in 2025

Office asset prices plummeted 32 percent on average from 2021 to 2025, according to Marcus & Millichap. This substantial drop occurred despite a national office vacancy rate decline in 2025. The market's financial valuation of office assets has fundamentally decoupled from physical occupancy, signaling a deeper revaluation of commercial real estate.

Office attendance climbed to nearly 70 percent of pre-pandemic levels in 2025, also reported by Marcus & Millichap, yet office asset prices have significantly dropped. This indicates a fundamental disconnect between physical presence and market valuation. The tension lies between increasing physical utilization and eroding investment performance.

While some metrics suggest a return to normalcy, the office market is undergoing a profound transformation where quality and utility are paramount, likely leading to continued pressure on older assets and a redefinition of future demand, especially with AI's emerging influence. This points to a permanent re-evaluation rather than a temporary dip in market value.

Office Attendance Rebounds, Vacancy Declines

Despite the broader market shifts, physical attendance at offices shows a measurable rebound in 2025, suggesting a partial return to pre-pandemic routines for some workforces.

70 PERCENT — Office attendance climbed to nearly 70 percent of pre-pandemic levels in 2025, according to Marcus & Millichap.
16.3 PERCENT — The national office vacancy rate declined from a peak of 17.2 percent in the first half of 2024 to 16.3 percent by late 2025, according to Marcus & Millichap. (Data as of late 2025)
140 BASIS POINTS — The national office vacancy rate dropped by 140 basis points over the past 12 months, according to Yardi Matrix.

These figures suggest a gradual return to physical office spaces, indicating a partial rebound in demand for workplace presence. However, the national office vacancy rate was also reported as 18.4 percent at the end of December 2025 by Yardi Matrix, indicating a significant disagreement on the current state of vacancy and suggesting a volatile market where even recent data points diverge substantially.

Metric	2021-2025 Trend	2025 Value
Office Asset Price Change	Declined 32%	N/A
Average Office Cap Rate	Expanded	7.5%
Properties Sold (per sq ft)	N/A	$192
National Listing Rate (per sq ft)	N/A	$32.86

Office asset prices declined on average 32 percent from 2021 to 2025, according to Marcus & Millichap. The average office cap rate has expanded to 7.5 percent, also reported by Marcus & Millichap. Properties sold at $192 per square foot at the end of December 2025, while the national full-service equivalent listing rate was $32.86 per square foot in December 2025, according to Yardi Matrix. (Data as of December 2025) Despite increasing occupancy, the significant drop in asset prices and expanding cap rates reveal a fundamental revaluation of office real estate, indicating investor caution and a shift in market value. Companies clinging to outdated office portfolios are effectively holding depreciating assets, as the 32 percent average decline in office asset prices since 2021 indicates a structural devaluation that even increasing attendance cannot reverse.