Office Supply Pipeline Shrinks; Coworking Gains Market Share

The U.S. office supply pipeline continued to shrink in 2025, with projects planned or under construction representing 1.7% of stock nationally, down from 3% a year ago, CommercialCafe reported. Conversely, while new construction has slowed, two office markets have emerged as bright spots: Manhattan and San Francisco.

Additionally, coworking has continued to solidify its value and increase its share in the office market, said CommercialCafe. Twenty-two million square feet of coworking space opened in 2025, 16% more than in 2024, for a 30-basis-point increase in market share to surpass 2%.

“While New York City is leading the office comeback and the AI sector is driving recent demand in San Francisco and in the Bay Area, office recovery elsewhere has been nuanced and varies greatly city by city and even building by building,” said Peter Kolaczynski, director, Yardi Research. “Though we are seeing localized winners, the overarching challenge remains the lower physical occupancy rate compared to pre-COVID numbers.”

Pictured: An Industrious coworking space in San Francisco.

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