Office leasing activity surged in the first quarter of the year. As a result, roughly 120 million square feet of new leases were signed nationwide. This total reflects a 25 percent increase compared to the first quarter of 2025. In addition, it marks the highest quarterly volume recorded since 2018.
The growth was largely driven by a rise in smaller lease transactions. Consequently, total deal volume reached its highest level in more than a decade. Since the pandemic, leasing patterns have continued to evolve. Smaller deals have become more common across the office market. As a result, average lease sizes have remained below pre-pandemic levels. New lease sizes have stayed about 15 percent below historical averages. This shift has been influenced by slower hiring and limited availability in newer buildings.
At the same time, shorter lease terms have been more widely adopted. Therefore, leasing activity has been supported by greater flexibility among tenants. Across major markets, recovery trends have varied. Nearly half of the largest office markets have returned to within 10 percent of pre-pandemic leasing levels.
Cities such as Charlotte, New York City, Miami, and San Francisco have led the recovery. In these markets, leasing activity has exceeded prior benchmarks. Demand from financial institutions has also supported leasing momentum. As a result, cities with strong banking sectors have seen stronger recoveries.
However, several markets remain below historical levels. Atlanta, Washington, D.C., Chicago, Denver, Seattle, San Diego, and Philadelphia continue to lag. Looking ahead, the first-quarter surge may not be sustained. Economic uncertainty is expected to weigh on leasing activity moving forward.
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