Jacob Rowden, research director at JLL, told the REIT Report podcast that a 6.4% increase in U.S. office leasing during the last 12 months reflects an ongoing post-pandemic structural shift as companies realign space requirements with actual headcount.
By mid-2025, companies had expanded headcounts by more than 5% from 2019 levels. At the same time, they had cut almost 10% of their office portfolios, Rowden noted. This gap between workforce size and available office space has fueled the current surge in leasing.
Rowden said that while certain geographic markets have been more advanced within this recovery, “today we’re at a point where there’s more parity across markets than there has been really at any point in the last six years.”
Meanwhile, five consecutive quarters of positive net absorption “gives us a lot of confidence that we've entered a new expansionary cycle. This is not a one quarter or two quarter temporary trend that's potentially going to reverse in the short term. It's something that we're seeing sustained over more than a year now.”
At the same time, Rowden emphasized that while AI has contributed to the rise in office leasing, “we are very far from a single industry being dominant in this growth.”
Rowden also noted that effective rents, especially in the new office segment, “have been growing faster than we've seen in probably 20 years in the office sector."