Office Supply Pipeline Shrinks; Coworking Gains Market Share

The U.S. office supply pipeline continued to shrink in 2025, with projects planned or under construction representing 1.7% of stock nationally, down from 3% a year ago, CommercialCafe reported. Conversely, while new construction has slowed, two office markets have emerged as bright spots: Manhattan and San Francisco.

Additionally, coworking has continued to solidify its value and increase its share in the office market, said CommercialCafe. Twenty-two million square feet of coworking space opened in 2025, 16% more than in 2024, for a 30-basis-point increase in market share to surpass 2%.

“While New York City is leading the office comeback and the AI sector is driving recent demand in San Francisco and in the Bay Area, office recovery elsewhere has been nuanced and varies greatly city by city and even building by building,” said Peter Kolaczynski, director, Yardi Research. “Though we are seeing localized winners, the overarching challenge remains the lower physical occupancy rate compared to pre-COVID numbers.”

Pictured: An Industrious coworking space.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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