Q1 national leasing uptick

U.S. office tenants signed about 120 million square feet of leases in the first quarter, the strongest quarterly pace since 2018. (costar.com) That total was roughly 25% higher than a year earlier, according to industry reporting on first-quarter activity. CoStar said the jump was driven in part by a surge in smaller deals rather than only a handful of giant headquarters transactions. (costar.com) National office demand is also firming on other measures. Cushman & Wakefield said four-quarter rolling net absorption topped 5.2 million square feet in Q1 2026, the highest post-pandemic reading, while sublease inventory fell 13.6% from a year earlier to 101 million square feet. (cushmanwakefield.com) The rebound is not spread evenly across the country. Cushman & Wakefield said 57 U.S. office markets posted positive absorption over the past four quarters, up from 33 markets in full-year 2024, with San Francisco, Orange County and Dallas among the stronger performers. (cushmanwakefield.com) Landlords are getting help from a shrinking pipeline of new buildings. Cushman & Wakefield said office completions fell 40% year over year in Q1, and space under construction dropped to 18.6 million square feet, the lowest level this century and equal to just 0.3% of inventory. (cushmanwakefield.com) Big brokerages have been describing the same pattern for months: tenants are leasing again, but they are choosier about what they take. CBRE said occupiers in 2026 are favoring high-quality, flexible and sustainable offices, especially in urban gateway markets such as Manhattan and San Francisco. (cbre.com) That split shows up in local numbers. In Manhattan, new leasing reached 9.5 million square feet in Q1 2026, the highest quarterly total since the second quarter of 2019 and the strongest first quarter since 2014, according to Cushman & Wakefield. (assets.cushmanwakefield.com) The market is still recovering from a long reset after remote and hybrid work cut space needs. CBRE said in a 2024 leasing study that lease counts had recovered faster than square footage, with the average office lease size still 27% smaller than before the pandemic in the first half of that year. (cbre.com) The first-quarter leasing burst does not mean the office slump is over everywhere. JLL said delinquency rates on office loans kept rising into Q1 2026 even as sales and leasing improved, a sign that stronger demand for better buildings is arriving alongside continued pressure on weaker ones. (jll.com) For now, the clearest change is pace: more tenants are signing leases, more markets are absorbing space, and fewer new offices are arriving to compete with them. (cushmanwakefield.com)