U.S. Office Construction Falls to Lowest Level Since 2011 as Market Resets

U.S. Office Construction Falls to Lowest Level Since 2011 as Market Resets

The amount of office space under construction in the United States has plunged to its lowest level in nearly 15 years, marking one of the sharpest contractions in the sector’s modern history.

The total pipeline now stands at just 57 million square feet, a 65% decline from the late-2019 peak of 160 million square feet. The retreat began with the pandemic in 2020, deepened as interest rates rose starting in 2022, and continues as developers recalibrate to a fundamentally changed office market.

Major Markets Hit Hardest

The nation’s largest office hubs are seeing the most dramatic pullbacks. Across the 12 U.S. metros with more than $50 billion in office asset value, the construction pipeline is now roughly 60% smaller than a decade ago. By comparison, all other markets have experienced a drop of about 40%.

Importantly, the shift away from big cities began before COVID-19. In the late 2010s, developers increasingly pursued projects in high-growth secondary markets, following migration and employment trends that favored more affordable regions.

Urban Cores Lead the Decline

Inside major metropolitan areas, central business districts and other dense urban zones have seen the steepest contractions. Their office pipelines are now one-third of what they were in 2015. Suburban construction has also slowed, but its decline has stabilized over the past year—now hovering around 30% below its mid-2010s peak.

This relative stability suggests suburban projects have had an easier time securing capital since interest-rate increases paused, and may also be benefiting from a broader post-pandemic shift toward suburban living and employment patterns.

A Changing Mix of Office Development

The contraction is not only geographic but structural. In the 2010s, traditional multi-tenant office buildings made up roughly two-thirds of new construction. Since 2023, that share has fallen to about half, with the rest composed of owner-occupied offices, medical facilities, and buildings with biotech lab components.

Lab construction surged dramatically, reaching nearly 16 million square feet in 2023—four times the volume of just five years earlier. But that momentum has reversed sharply. As the 2020–2023 building wave created an oversupply and life-sciences demand cooled, the lab pipeline has fallen by more than 50% in two years.