Separately, JLL has indicated that leasing momentum is expected to recover in 2H2025. Tenants’ requirements increased 5.8% q-o-q in 2Q2025 and are at the highest level since 4Q2021. JLL expects leasing activities to grow 5% in 2025. Office demand is expected to recover in 2H2025, driven by improved business sentiment as trade tension eases, positive work-from-office momentum, dwindling new supply and easing of downsizing.
Signs are emerging that the US commercial real estate sector, in particular office could have seen a floor. For instance,on July 28, Orion Properties’ board of directors rejected a bid from Kawa Capital Management pricing the REIT at US$2.75 per share. On the other hand City Office REIT has entered into a merger agreement with MCME Carell Holdings LP, and MCME Carell Holdings LLC.
According to CBRE, the US office market recorded its fifth consecutive quarter of positive net absorption at 1.1 million sq ft in 2Q2025. Many tenants are renewing their leases due to the high cost of relocating and prohibitive build-out expenses, it noted. Smaller tenants signing for 10,000 to 20,000 sq ft of office space accounted for 53% of the new leases. The nationwide vacancy rate is expected to have peaked at 19% in 2Q2025.
