Office Space Rebound in 2025: Navigating the Shifting Landscape
Introduction
The commercial real estate market has undergone seismic shifts since 2020, and in 2025, it's clear we're not going back to business as usual. While remote work remains part of the landscape, a growing number of companies are issuing return-to-office mandates, triggering new demand patterns for office space across the country. At the same time, some areas are still battling high vacancy rates, prompting developers and cities to rethink how office space is used.
This blog explores how these trends are playing out nationally—and right here in Columbus, Ohio—and what it all means for the broader real estate market.
National Trends: A Mixed Recovery
The national office market continues to show uneven signs of recovery. According to the latest CommercialEdge National Office Report, the U.S. office vacancy rate reached 19.9% at the end of March 2025, up 170 basis points year-over-year. The share of distressed office transactions also rose to 10.8% in 2024, reflecting lingering challenges in the sector.
Markets like Austin (28.5%), the Bay Area (25.5%), and Denver (25.2%) continue to report the highest vacancy rates, underscoring the regional disparities driven by local economies, remote work adoption, and tenant preferences.
Source: CommercialEdge Office Report
Return-to-Office Mandates Reshape Demand
Across the U.S., major employers like Amazon, JPMorgan, and Goldman Sachs have implemented stricter return-to-office policies, requiring employees to work on-site full time or most of the week. This shift is influencing not just how much space companies lease—but where and what kind of spaces they want.
The renewed emphasis on in-person work has led to increased leasing activity in major markets, particularly for spaces that can support collaboration and company culture. Companies are reevaluating outdated footprints and opting for smaller, more strategic offices that serve as hubs for in-person meetings, team-building, and client-facing interactions.
This trend is impacting office space demand in both urban cores and suburban markets, with some companies choosing to consolidate locations while others expand regionally to accommodate talent spread across multiple areas.
Columbus, Ohio: Adapting to a New Office Era
In Columbus, developers are taking proactive steps to address the office vacancy challenge through demolition, repurposing, and mixed-use innovation.
According to an article from the Columbus Dispatch, the region has removed or converted over 3 million square feet of office space in recent years. Projects include:
Demolishing a 123,000-square-foot office building in Crosswoods to build apartments.
Converting the former Discover building in New Albany into a mix of residential, hospitality, and dining space.
Repurposing empty office buildings into schools, community centers, and public facilities.
While 19.3% of central Ohio office space remains vacant, these strategic adaptations are helping stabilize the market and reimagine how commercial real estate fits into the city’s future.
Source: Columbus Dispatch
Conclusion: Impacts on the Broader Real Estate Market
The office market’s evolution isn’t confined to commercial buildings—it’s rippling into the residential sector as well. As companies recall employees to offices—many in different states—some homeowners are forced to relocate. In recent weeks, we've worked with multiple clients who need to sell their Columbus homes in order to return to offices elsewhere.
This also affects urban living preferences. With fewer people working downtown, there's reduced demand for homes near central business districts. Some buyers are prioritizing space, value, and lifestyle over proximity to work, reshaping where and how people choose to live.
Whether you're an investor, employer, or homeowner, understanding these changes is key to staying ahead of the curve.
📩 If you’re wondering how these trends might affect your next move—whether buying, selling, or investing—reach out anytime. I’m here to help you navigate it.