According to the WSJ, the US office market saw a significant increase in leasing activity in the first quarter of this year. Approximately 115 million square feet of space was leased, which represents a 13% increase from the previous quarter and the highest level since before the pandemic in mid-2019.
But then, tariffs for everybody! Now tenants are worried that a recession is coming, inflation is going to rise, and that so too will interest rates. Uncertainty is bad for business.
Here's where things broadly sit as of the beginning of this year:
The national office vacancy rate was 19.7% at the end of February 2025
San Francisco had the highest vacancy at 27.8%
$7 billion worth of office sales were recorded in the first two months of the year and the average price was $177 per square foot
The cheapest markets are/were in the midwest with Minneapolis-Saint Paul recording the lowest average sale price of $50 per square foot (versus $215 psf a year ago)
Chicago averaged $67 psf
The most expensive markets were places like San Diego ($662 psf), Manhattan ($450 psf), San Francisco ($282 psf), Miami ($239 psf), and Los Angeles ($207 psf) — we continue to see a flight to quality
Maybe things will get better later this year, or maybe they won't. It's impossible to know what comes next in this trade war.
Cover photo by Delia Little on
It has now been over 4 weeks since New York City started charging motorists to enter Manhattan so that they pay for a portion of the impact they have on roadways in the city. And the data overwhelmingly supports that travel times have fallen as a result. Transit ridership also appears to be increasing, despite what some critics will tell you, and trains and buses appear to be moving more efficiently as well (via Fast Company):
More commuters are opting for buses to cross Manhattan, and those buses are now traveling more quickly, too. Weekday bus ridership has grown 6%, while weekend ridership is up 21%, compared to January 2024. (Subway ridership has also grown by 7.3% on weekdays and 12% on weekends, part of a larger trend in ridership growth happening since the fall, per the MTA. Anecdotally, some subway riders have said they’ve seen more packed trains on their morning commutes.) Buses entering Manhattan from Queens, Staten Island, and the Bronx are saving up to 10 minutes on their route times, which also makes their arrivals more reliable.
Today is the third day of New York's new congestion relief zone. And if you're curious to see how it's already impacting traffic conditions, here is a website run by Joshua Moshes and Benjamin Moshes, under the supervision of Brown University Professor Emily Oster.
The site collects Google Maps traffic data every 15 minutes for 19 routes leading into Manhattan (some of which are directly affected by the new relief zone and some of which are not). It then calculates average traffic times for each day of the week, both before and after the congestion charge.
Here is the Holland Tunnel on Sunday (which was day number one):
