Lessors of Nonresidential Buildings NAICS 531120

Jul 20, 2026 - Office Demand Continues to Show Slow but Steady Growth

• According to a Q2 2026 US Office Report by commercial real estate services firm Avison Young, the national office market continued to stabilize, with availability falling for the eighth straight quarter to 22.1%, driven by shrinking inventory from office conversions, demolitions, and adaptive reuse. Trophy and Class A buildings continued to outperform, with trophy rents averaging about 50% higher than Class B space, and demand pushing rents higher as tenants favored premium offices. Leasing activity remained 21% below the 2015-19 average, while first-half 2026 leasing slipped 3.2% from a year earlier. Average lease sizes have fallen by 14.6% since 2019, although renewals have increased by 3.7% year over year. Office utilization reached 59.2% of May 2019 levels, reflecting a gradual return to workplaces, while 93% of tracked markets posted year-over-year declines in availability.
• Bisnow reports that demand for large industrial warehouses has rebounded in 2026, with tenants signing more leases exceeding 500K SF, helping absorb pandemic-era oversupply and strengthening landlords' pricing power. First-half industrial leasing activity reached 490 million square feet (SF), up 27% from 2025, while vacancy for warehouses of at least 750,000 SF fell to 7.3% in the first quarter from 8.3%, according to real estate firm Savills. Demand has been fueled by third-party logistics firms, data center supply chains, and companies stockpiling inventory amid tariff uncertainty and geopolitical disruptions. CompStak found that lease renewals for spaces of 500K SF or more averaged 84% rent escalations in the first quarter, outpacing smaller renewals. Tenants are also consolidating into newer Class A facilities with greater efficiency, although lease negotiations remain lengthy as occupiers carefully reevaluate their logistics networks.

• AI is driving another surge in data center investment, according to The Wall Street Journal. Operators DataBank, EdgeCore Digital Infrastructure, and others are pursuing sales of majority stakes worth tens of billions of dollars. S&P Global Market Intelligence said data center M&A reached about $50 billion in 2025, more than double the previous year. Rising construction costs, power constraints, and the enormous capital needed for new facilities are driving developers to seek larger investors. Access to reliable electricity has become a key factor in valuations. Despite strong investor interest, only a limited number of firms can finance multibillion-dollar acquisitions. Growing community opposition over power use, noise, and other concerns is also increasing development risks and could affect future deal activity.
• Facilities Dive reports that, according to Colliers, industrial real estate demand is increasingly driven by access to reliable power, existing infrastructure, and modern facilities capable of supporting automation and other energy-intensive operations. Industry experts say occupiers are favoring Class A properties with operational flexibility, while developers and data center operators are placing greater value on sites with substantial electrical capacity and utility commitments. Colliers reported that nearly 70% of US markets recorded positive industrial absorption in the first quarter, signaling a broad-based recovery in occupier activity. At the same time, rent growth remains modest as the sector continues to normalize following a period of rapid expansion and overbuilding after the pandemic.