Commercial Property Managers NAICS 531312

Sep 15, 2025 - Office Vacancies Remain Elevated

• In August, the US office vacancy rate was 19.4%, unchanged from July but up 130 basis points compared to a year earlier, according to real estate software firm Yardi Matrix. Remote work continues to put downward pressure on demand for office space, especially in central business districts. Low vacancy is also reducing property valuations. In 2021, about 20% of office property transactions were sold at a discount. As of July 2025, about 46% of office property transactions were discounted. Cities with the highest levels of discounted transactions include Houston (69%), Manhattan (64%), Washington, DC (64%), and Dallas (61%).
• Arkansas-based department store company Dillard’s, with a partner, recently bought a 47-year-old mall in Longview, Texas, defying a trend of retailers unloading real estate, according to The Wall Street Journal. The move may have been a defensive one, according to a Dillard’s executive. In recent years, investors have snapped up several malls on the cheap as demand has shifted online and to discount and specialty retailers. Some new mall owners have allowed properties to fall into disrepair, and some cities have sued mall owners for not properly maintaining properties while continuing to collect rent. Smaller mall tenants often can relocate if the property isn’t cared for. However, department stores usually own the space they occupy in malls, exposing them to potential bad-faith mall owners.

• About two-thirds of office users plan to increase their square footage over the next three years, according to CBRE’s 2025 Americas Office Occupier Sentiment Survey. One-third of firms surveyed said they plan to reduce their office footprints over the next three years. However, company size tends to dictate the likelihood of expanding or contracting office use. In 2025, 95% of smaller firms said they planned to increase their office usage, compared to just 85% in 2024. About 60% of companies with 10,000 employees or more said they plan to reduce square footage over the next three years. However, industry insiders suggest that firms seeking to reduce expenses are doing so by rightsizing their office occupancy, not by downgrading to lower quality space.
• CBL Properties’ $178.9 million acquisition of four mid-tier malls signals a broader recovery in the mall sector beyond luxury properties, according to The Wall Street Journal. After emerging from bankruptcy and shedding 20 malls pre-pandemic, CBL is doubling down on dominant, regionally focused enclosed centers. The deal reflects renewed interest in middle-market malls, driven by limited new retail construction and rising demand for space. While high-end mall owners like Simon and Brookfield continue investing in upscale renovations, CBL is revitalizing its properties by replacing department stores and tailoring offerings to local markets. The company reported growing net operating income for only the second time since 2016, underscoring the viability of well-positioned, non-luxury malls. Industry leaders now see select mid-tier malls as long-term “keepers,” suggesting that the mall renaissance is not confined to luxury-focused assets. With open-air retail vacancies near historic lows, even second-tier malls are attracting expanding retailers and generating stronger returns.