Facing mounting pressure from shifting corporate strategies, decentralised office spaces across numerous markets are experiencing considerable rent declines as businesses increasingly gravitate back toward central business district (CBD) hubs. Average CBD office listing rates in the U.S. stand at $38 per square foot as of May 2025, representing a substantial 29.8% decline from pre-pandemic levels, signaling significant market recalibration across the commercial real estate landscape. This trend coincides with a growing corporate emphasis on centralized operations, workplace culture rebuilding, and strategic resource consolidation.
The pandemic-era surge toward suburban and satellite offices, which initially offered compelling cost advantages and reduced commute times, appears to be plateauing as corporations reassess their spatial requirements. Secondary and tertiary markets, despite maintaining the largest share of flexible office space at 47% in 2024, now contend with oversupply challenges and intensifying price competition. The suburban coworking inventory expanded by 13% year-over-year as of Q3 2024, yet this growth has contributed to downward rent pressure amid shifting tenant preferences. National statistics show a troubling 19.4% vacancy rate in office spaces, reflecting the ongoing challenges in the market.
Gateway markets, traditionally dominated by CBD properties, have witnessed a subtle but meaningful shift in flexible office space distribution, dropping from 45% in 2023 to 43% in 2024, reflecting an ongoing reconsolidation trend. Companies are increasingly relocating staff from scattered suburban locations back to city-center facilities, prioritizing collaboration opportunities and enhanced workplace amenities that support hybrid work models. Companies are also investing in green building certifications to attract environmentally conscious talent and meet corporate sustainability goals. This migration pattern correlates with broader labor market stabilization and renewed emphasis on physical presence for organizational cohesion.
Economic considerations remain paramount in real estate decision-making; however, the previously decisive cost advantage of decentralized locations is diminishing relative to the perceived benefits of CBD presence. This contrasts with Singapore’s stable Grade A office rents of SGD 11.60 psf in Q1 2025, showing geographical variations in market recovery. Distinctly, regional variations persist, with markets such as New Jersey experiencing 36% year-over-year growth in suburban coworking spaces, while traditional CBD landlords adapt by integrating flexible workspace configurations within conventional office buildings, demonstrating the commercial real estate sector’s continued evolution toward hybrid occupancy models.
