North American Office Posts Strongest Performance Since Pandemic

The North American office market is having its best year since the COVID-19 lockdown upended demand for the sector, with vacancy declines in the second quarter across Canada and the United States for the first time since 2019, Lee & Associates reported.

“Tenant growth has returned and institutional investors are showing greater confidence in premium assets,” the firm said in its 2026 Q2 North American Market Report. “Also, with little new space being built and more obsolete office properties being redeveloped, total inventories in the U.S. and Canada declined together for the first time on record.”

The turnaround for U.S. office over the past four quarters has totaled 29.7 million square feet. Following first-half net growth of 16.7 million square feet, the U.S. market is on track in 2026 to halt its six-year slide in tenant expansion. Year-to-date net absorption in Canada totals 4.4 million square feet and this year could surpass the 5.4-million-square-foot total for 2019.

Not all metros report strong performances, though. New York City, Dallas, Austin, Houston, San Francisco and San Jose are surging, while Los Angeles, Chicago, St. Louis and Washington, D.C., still seek stability, reported Lee & Associates.