# US office market was showing signs of recovery until the tariffs arrived

By [Brandon Donnelly](https://brandondonnelly.com) · 2025-04-15

office-market, us-office-market, commercial-real-estate, vacancy, manhattan, miami, los-angeles, san-francisco, trade-war, wall-street-journal, real-estate

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[According to the WSJ](https://www.wsj.com/real-estate/commercial/trumps-trade-war-is-threatening-to-derail-the-office-market-recovery-77ac822e), 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](https://www.commercialedge.com/blog/national-office-report/) 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_](https://unsplash.com/@dlittle?utm_content=creditCopyText&utm_medium=referral&utm_source=unsplash) _on_ [_Unsplash_](https://unsplash.com/photos/a-yellow-taxi-cab-driving-down-a-street-next-to-tall-buildings-UHBAmEUQzpA?utm_content=creditCopyText&utm_medium=referral&utm_source=unsplash)

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*Originally published on [Brandon Donnelly](https://brandondonnelly.com/us-office-market-was-showing-signs-of-recovery-until-the-tariffs-arrived)*